Buying New Build - Estate Manager/Director/Secretory role

ashdis86

Hi all,

I am in a bit of a pickle, I am trying to understand the terms of our developers contact. We are buy a freehold property on a new build estate. I have just come to grips with the estate maintenance fees through reading through these forums and the contract and accept this is the way forward now (with new builds). This was partially explained to us when we reserved the plot as well.

However on reading the contract it says "You are required under the terms of the contract to become a member of the Management company and if required, agree to become a director/secretary of the management company."

Reading the contract a bit further it does say we can be asked to become a director or secretary to which we have to agree to.

I called the development company who wouldn't really tell me much other than some people are able to get out of it because they are already directors of a company.

Without meaning to sound self righteous, this is not something I would have time for. If its one day, one week or one months worth of my time I just don't want to get involved with it. I was reading about other peoples experience as a director or secretary appointed of a new build estate and they had to collect money from people, organise meetings, pay contractors. I have a mum in care at the moment so if I am not working I am spending as much time as I can with her. This just seems like something that would add additional stress.

Has anyone any first hand experience with becoming a part of a management company for a new build estate?

NeilCr

Yes. Me.

I have been a director of two new build estates. Presumably, the builder is passing/or has passed on the freehold of the estate to the residents?.

I've never seen anything in either sets of paperwork about having to be a director. If you guys own the freehold then you get a share in the management company. I've never been in a situation where people have been "forced" to become directors - in my experience you get folks who want to do it. They can't frogmarch you to meetings...

It's actually not that onerous (although I completely understand why you don't want to do it). Most management companies employ managing agents to do the hard yards - collecting service charges, arranging contractors, ensuring laws (like H and S) are adhered to, getting the accounts done etc.

We have four or five directors meetings a year plus an AGM and are in contact informally on a weekly basis. How much you have to do is, usually, dependent on how good the managing agent is!

ashdis86

NeilCr wrote: »

Yes. Me.

I have been a director of two new build estates. Presumably, the builder is passing/or has passed on the freehold of the estate to the residents?.

I've never seen anything in either sets of paperwork about having to be a director. If you guys own the freehold then you get a share in the management company. I've never been in a situation where people have been "forced" to become directors - in my experience you get folks who want to do it. They can't frogmarch you to meetings...

It's actually not that onerous (although I completely understand why you don't want to do it). Most management companies employ managing agents to do the hard yards - collecting service charges, arranging contractors, ensuring laws (like H and S) are adhered to, getting the accounts done etc.

We have four or five directors meetings a year plus an AGM and are in contact informally on a weekly basis. How much you have to do is, usually, dependent on how good the managing agent is!

Thank you Neil. This is really helpful. The contract does say we have to "accept the appointment as Director or Secretary. Whilst what you said doesn't sound to bad I would constantly feel anxious in case a meeting or important task that required my attention fell on something that I had to do with my mother (which is very frequent).

What does your role entail? Do you have to chase unpaid invoices on your estate? I think that would be the biggest worry for me. I would hate to go knocking on people's doors chasing money or asking for opinions on the state of the road etc. The list of "duties" and "responsibilities" is not laid out in this contract.

Thank you again for your answer.

NeilCr

Nope.

Nothing like that. The Managing Agent does all the chasing for service charges and residents are given their number as point of contact for any queries/complaints etc. That doesn't stop the occasional resident bending your ear. I don't mind that too much as you get a sense of how people feel but I, usually, end up directing them to the Managing Agents.

In effect, subject to votes and what is laid out in original house sale documentation, we make the decisions on how the estate is run. For example, we set the service charges, we have introduced CCTV, we are considering speed bumps. Quite a lot of this is dependent on advice from the Managing Agent. To an extent, it is up to you how much you put in - although attendance at meetings is important.

I am retired so am around more then those who work. I am happy to meet the Managing Agent and contractors on site and I keep an eye on the bins (my little obsession!). But, I don't have to.

I enjoy it and it is good to be involved in the direction of how the estate is going in.

ETA

How big is your estate and do you know if there is a Managing Agent there, already? Are some houses already occupied? If so, might be worth knocking on a few doors to see how it is all working.

mrschaucer

It might say that you "have to" be a director or secretary, but accepting the role and then making a right pig's ear of it so they never ask you again would also seem to be possible?

jennhg88

We have in our contract that we can be nominated for the role of director, I don!!!8217;t think they would randomly pluck someone in the estate to do it.

SallyDucati

I have the same clause in the contract for the new build I am currently buying. To be honest I’m not that concerned about it, a management company is in place so any director duties shouldn’t be too onerous. There are also 37 properties on the development so I may well not be asked!

On another note re new builds - If it is a small developer check the 10 year warranty if it’s not NHBC. Recently found out the underwriters of the policy on the house I’m (hopefully) buying have gone bankrupt!

[Deleted User]

I am a director of our small management company and had to take on the role of chair/secretary because someone needs to do it, it has to work. There are always people who are quite happy to see other people take on roles and do the work. They enjoy the benefits but don`t do anything to contribute, everyone is busy, pull your weight. I am sick of it and one of the reasons I am selling. Love it here but hate being the one to do it all


All shareholders are invited to be directors, the newest owner here refused but then again who knows his circumstances, he might be a bankrupt and these things have to be declared to the bank,

NeilCr

kittie wrote: »

I am a director of our small management company and had to take on the role of chair/secretary because someone needs to do it, it has to work. There are always people who are quite happy to see other people take on roles and do the work. They enjoy the benefits but don`t do anything to contribute, everyone is busy, pull your weight.

Yes.

I think there is truth in this too.

It can depend on the size of the estate. Where I am now there are 69 units and we have 8 directors. We wouldn't mind one or two more from a certain part which is underpresented but that is mostly made up of second homers and tenants so most owners are off site.

At the first place there were 15 flats and,when I was there, enough people were okay about being directors. One guy was very active so it did get left to him - we had to keep an eye on him in case he went off piste, though, as he had odd ideas about some things. My friend bought my flat and I know they struggle to get directors now.

On occasions, people do tend to come to AGMs and moan - when you suggest they become directors, themselves, they are "too busy" etc. I haven't had it happen much and we are quite ribust in reply!

ashdis86

NeilCr wrote: »

Nope.

Nothing like that. The Managing Agent does all the chasing for service charges and residents are given their number as point of contact for any queries/complaints etc. That doesn't stop the occasional resident bending your ear. I don't mind that too much as you get a sense of how people feel but I, usually, end up directing them to the Managing Agents.

In effect, subject to votes and what is laid out in original house sale documentation, we make the decisions on how the estate is run. For example, we set the service charges, we have introduced CCTV, we are considering speed bumps. Quite a lot of this is dependent on advice from the Managing Agent. To an extent, it is up to you how much you put in - although attendance at meetings is important.

I am retired so am around more then those who work. I am happy to meet the Managing Agent and contractors on site and I keep an eye on the bins (my little obsession!). But, I don't have to.

I enjoy it and it is good to be involved in the direction of how the estate is going in.

ETA

How big is your estate and do you know if there is a Managing Agent there, already? Are some houses already occupied? If so, might be worth knocking on a few doors to see how it is all working.

Thank you for your reply. You make it sound not as bad as I was imagining it in my head now. I think the fact the list of "duties" and "responsibilities" of the role were not made obvious to me in the contract or by any form of communication from the developers, it just concerned me.

The development is just over 100 homes.

kittie wrote: »

I am a director of our small management company and had to take on the role of chair/secretary because someone needs to do it, it has to work. There are always people who are quite happy to see other people take on roles and do the work. They enjoy the benefits but don`t do anything to contribute, everyone is busy, pull your weight. I am sick of it and one of the reasons I am selling. Love it here but hate being the one to do it all


All shareholders are invited to be directors, the newest owner here refused but then again who knows his circumstances, he might be a bankrupt and these things have to be declared to the bank,

This is exactly why I am hesitant. It's enough to be one of the reasons to make you sell. This is not a position I would want to be in. I do not mind helping out. But I do not want to be relied upon.




Reading everyone's comments has made me feel a lot better about it. Hoping to be able to speak to someone from the legal team today to clarify the roles and what exactly they expect.