Avoid Persimmon or Bovis fleecehold?

petenuttall

Yes obviously that is preferable and I have dropped the price by 8% in 6 months and may well have to drop it more. My fundamental issue is that is a niche property in the 95 percentile of the market - eg. 95% of equivalent properties are cheaper. That's (in the opinion of half a dozen estate agents) justified by the characteristics of the property but the fact remains I'm pitching at a very small market.

Anyway, responses to my original query would be much appreciated. Is it possible to sidestep the open ended potential increases in management charges with some canny conveyancing?

For background, a "fleecehold" isn't a leasehold. The property is freehold but comes - as I understand it - with a covenant that obliges you to pay an estate management fee and often other charges too, forcing you to seek permission from the estate company if you want to extend etc. They can sell on the estate to speculators who jack the charges and don't do adequate maintenance. You have no legal redress because the covenant is on your deeds, they could take your house if you refuse to pay. Real feudal stuff.

NeilCr

Actually, really common and normal having such covenants on a new build estate. We have them (and I have a freehold house)- and no you can't sidestep them.

If you could "get away with it" so would everyone else and there would be no money to keep up and maintain the communal parts

eddddy

petenuttall wrote: »

Anyway, responses to my original query would be much appreciated. Is it possible to sidestep the open ended potential increases in management charges with some canny conveyancing?

It's very unlikely. Each property will be required to pay a fixed percentage of the charges.

If they reduce your percentage, they will have to increase the other properties'.

It would be unworkable, if they tried to limit any increase in your charges over time to less than increases in other peoples charges.

(Also, if it were possible, it wouldn't really be down to 'canny conveyancing' - it would be down to 'canny negotiation' of the contract terms.)

davidmcn

petenuttall wrote: »

Anyway, responses to my original query would be much appreciated.

You've got some. Please read #3 and #8.

stator

If it's an estate management fee the questions you need to ask are:
Do the freehold owners of each house own an equal share of the estate management company? If not, walk away. If you own the freehold company you can appointment your own contractors and control costs.
What exactly is the estate management company responsible for? If it's just maintenance of common areas, grass and parking then it's not too bad. If there are utilities like a sewage pumping station then it's a lot worse.

But no, you can't negotiate about the fees. If a road needs replacing in 25 years time, the owners of the properties will have to pay for it. There is no way your fees could be fixed at RPI, since no-one knows how much the road is going to cost in 25 years time.

petenuttall

NeilCr wrote: »

Actually, really common and normal having such covenants on a new build estate. We have them (and I have a freehold house)- and no you can't sidestep them.

If you could "get away with it" so would everyone else and there would be no money to keep up and maintain the communal parts

I have no problem paying reasonable costs for reasonable maintenance. But this not what happens in a large number of cases where the freehold of communal areas is sold on as an asset to speculators who jack up costs and don't do maintenance and you can do nothing about it

NeilCr

petenuttall wrote: »

I have no problem paying reasonable costs for reasonable maintenance. But this not what happens in a large number of cases where the freehold of communal areas is sold on as an asset to speculators who jack up costs and don't do maintenance and you can do nothing about it

But, you can't get out of paying them. So it's up to you on whether or not you take the risk.

As stator says worth finding out if the residents own the freehold of the estate (or if it is a builder who hands the freehold over when the estate is finished). On both new builds I have been in we have owned the freehold and it works/worked well. As a director I am very conscious of the service charge costs,

Smi1er

SallyDucati wrote: »

Do you mean you wouldn’t buy a leasehold house?

Well done on spotting my deliberate mistake