Restrictive Title - Management Company

jdpjamesp

I know that without showing the full title etc it will be hard for folks to comment but I would appreciate some reassurances. I'll try and explain! Please forgive me if I use the wrong terminology!
We are hoping to buy a property that's only a couple of years old. In the title there is a restriction meaning we have to enter into a covenant with a management company for the maintenance of common areas on the estate.
That's all well and good, it's nice to have the estate maintained. It's going to cost nearly £500 in fees to get this done which is a bit of a kick in the teeth.
Then there's the terms in the TP1 document. They lay out what is and isn't covered by this agreement, along with a nice line saying they can be changed by the management company from time to time to suit what they consider to be essential activities for maintaining the estate. Great. And then it goes on about the Owner's Proportion of the fees. There's no discussion of limits, just that they can come to us twice yearly it seems for money. The vendors haven't been approached yet, but what's to stop them slapping us with a bill for thousands of pounds? It seems like a license to print money! It's seriously putting us off completing at the moment.

NeilCr

Pretty common these days.

Do you know who owns the freehold of the estate as a whole. Often the residents do and form a management company to run the place. They tend to be much more careful re service charges than an absentee freeholder/builder.

I don't know whether you are buying a flat or a house, if it is a flat £500 a year is not bad at all - if it is a house that's round about what I am paying for mine.

I like the system. We own the freehold and I am a director so am involved in the running of the place and setting service charges. My partner loves my house but hates the thought of the restrictions so would never buy on an estate.

It's how you guys feel about the way it works, really.

jdpjamesp

Thanks Neil. It's a house. The £500 is just to set up the covenant with the management company. There's no indication of what they might charge. The current owners claim they've never been charged in 2 years.
I don't know who owns the freehold of the estate. Although that in itself sounds confusing as the property is marketed as freehold? Or do you mean that the land of the estate that's not owned by individuals is owned by an entity? In which case it's probably this management company. The deeds talk about Pentland Estate Management who are now part of the lovely First Port.

NeilCr

Aah sorry re £500. That'll teach me to speed read!

My house is freehold, too.

I meant the freehold of the common areas - as you say the land that is not owned by individuals.

Pentland are Managing Agents so it's probably not them. Quite likely it's the builder or someone they have sold it on to and who employ Pentland to do the day to day work. I'd ask as a Management Company run by the residents is usually a better bet - if the service charges haven't been collected for a couple of years it doesn't sound great.

If you do buy make sure there is a retainer for the years the vendor should have paid! I don't envy you FirstPort - we've just got rid of them..