Service Charges on unfinished New Builds

walsh22

I have recently moved into a new build, and we have received a letter from the developer about paying this years service charge.

This has not come as a surprise, we knew we would be paying this.
However, the letter states "for all homeowners to benefit from the green space". This green space does not exist yet, as building work is still ongoing and the space is used to store materials. We do not yet even have finished roads, visitors parking etc.

The developers claim the fee goes towards other maintenance works, which is fine. But surely while work is still going on this would be covered by them?

Myself and other neighbors feel we should only be charged from when site is complete, but not sure what grounds we have as we have always known this was part of the contract in buying the home.

Any help would be appreciated.

Thank you

Gilead

You probably have little grounds unless they offer some goodwill which is unlikely.

Your agreement with them starts the day you own the property regardless of the standard in the development. Unless your contract/covenant states otherwise.

InterestedParty2018

I expect your service charges are billed "in advance", based on a budget for the forthcoming service charge year. The budget would be drafted on the basis that all services are in place as they would be in the future.
If the funds are not spent during the year (ie communal gardens are not ready for use/maintenance), this will reflect in the service charge accounts (completed after the service charge year ends) and you should be credited any surplus collected.

It may seem pointless that you are paying money in, whilst fully anticipating it to be returned... which is correct. However, it is normal and reasonable for the budget to be presented as it will be in future years. This ensures stability and continuity.

If there is genuinely a massive difference in current costs versus future expenses (and full services not expected imminently), then perhaps the managing agent for the building/estate would consider part-payments. This would require discussion and agreement.

InterestedParty2018

Just to add,

All completed units (flats/houses) need to contribute towards service/estate charges, even if not sold.
Therefore, the developer will be responsible for the charges that are due for any unsold units, the same way you are responsible for your homes's charges.

The only service charge category that I am aware of which the developer often covers in full until construction is fully complete, is buildings insurance. Their construction policy (I believe) covers this.