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Freehold house with service charge

Glover1862
Posts: 410 Forumite

I'm looking at a property which is freehold and ticks all the boxes, however it has a small service charge (£220 per year) for the common areas and upkeep of the the two parking spaces. My concern is by how much it could increase by, I read leaseholders have some protection but freeholders have none, if this is true then I assume it will have a negative impact on the resale.
To make matters worse a company called Chamonix look after the site, I've never read so many negative reviews ever, I'd expect not much praise for a property management company but 99% give it the minimum rating, should I walk away or do others have more positive experience, the estate completed about 5 years ago ???
To make matters worse a company called Chamonix look after the site, I've never read so many negative reviews ever, I'd expect not much praise for a property management company but 99% give it the minimum rating, should I walk away or do others have more positive experience, the estate completed about 5 years ago ???
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Comments
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Who owns the freehold of the estate and employs Chamonix?. Do you know if the residents have the freehold or the developer or someone else?
I am in the same situation - I have a freehold house and we (the residents) own the freehold so we have control of the service charges and can hire and fire property managers.. Personally, as I've said before, I'd buy the same in the same situation. But, I'd be wary of the developer or someone else with the freehold as I don't think they'd have the same interest as residents0 -
Thanks for the reply, i’ll need to find out more but I have a feeling the whole site must have another freehold owner as it’s a fairly large and has mix of leasehold flats, nothing in the paperwork I have mentions having joint ownership of any other freehold. I just think that I’m asking for trouble in the future, maybe just move on now before I’m commited further and find something else.0
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It's very common with new estates. My second from last house was like this - we paid a service charge which went towards maintenance of the grounds, and upkeep of our two garages and spaces. tbh it never worried me and I wouldn't let it put me off buying a newer house in the future.
If you want a newish house, you're likely to incur it. Buy older, or accept it I'd say...
There should be something in the lease saying something about increases.2024 wins: *must start comping again!*0 -
Walk away.
A house where you have no control over costs will never be fully yours and will put potential buyers off when you come to sell.
Read all the negative articles in the press at the moment about these Fleecehold houses, there is a Law Commission Enquiry being carried out to look at the unfairness of all this.0 -
It is likely that the developer signed ownership of the shared land over to Chamonix so they are in effect (possibly) being paid by the residents to maintain their own land... so no comeback if they are not doing it to an acceptable standard. make sure you understand exactly what you are expected to pay for and what additional charges might be sent to you over and above the annual fee.
I would walk away (and have done), but only you know what you are happy doing. It is likely to put future buyers off though, if they research it before purchasing.0 -
I live in a new(ish) house and Chamonix are our estate managers. The residents of the estate are all shareholders in the management company and our three directors are all residents. We pay a service charge for estate maintenance. We own the roads, lighting, many tress etc and we also have a private sewerage pump. All of these things cost money to maintain. Our charge has increased recently and we have been advised that this is due to the fact that the developer under-priced it in order to sell the properties in the first place. It's still not extortionate and not bad value for all the things it pays for. I used to work for a housebuilder so have dealt with many managing agents. They are all bad but Chamonix are by no means the worst! They have to provide you with accounts (which are audited) of everything that you have paid for so they can't rip you off by charging for things that at are not necessary. The resident directors also work with them on these accounts and they certainly aren't going to pay money when they don't need to. Also, you say freeholders have no rights but we, as the management company, have every right to sack Chamonix and instruct another company if we do not like the job they are doing. At one stage we did not like the grounds maintenance company they were using so we got them to instruct another company to do the work. With regards to the comment of the developer signing over ownership to Chamonix for the shared land - this is not something I have ever come across. The developer signs ownership over to the residents upon completion of the final unit and when they have completed any works that have been agreed upon.0
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Monkeysocks42 wrote: »...... With regards to the comment of the developer signing over ownership to Chamonix for the shared land - this is not something I have ever come across. The developer signs ownership over to the residents upon completion of the final unit and when they have completed any works that have been agreed upon.
The signing over of shared land to the maintenance company is very common, definitely with other companies such as Greenbelt. I would be less concerned if the situation is like yours with shared ownership.
That is why it is important to fully understand what the situation is with the maintenance company and what you are signing up to!0 -
I believe in monkeysocks' situation the site may be commonhold.
That's where the residents own the company who in turn, appoint a management company (or undertake self-management of the site themselves ).
If that is the case, then the management company can only advise the residents elected directors of how much any service charge should be.
I live in such a development and we run things so well that our appointed management company, who manage 400 developments, use us as a benchmark to show other sites how a well managed site should run.0 -
That’s just it though, according to OP it’s a freehold house so there wouldn’t be a lease - I’m not sure what remedy the management company could have for non-payment of the service charge given there is no lease to forfeit.
We had someone in this situation. They refused to pay the service charge for years and we , finally, got a charge put on the house. While there is no lease on a freehold house the covenants, etc, which include service charges, form part of the TR1 and appendices0 -
That’s just it though, according to OP it’s a freehold house so there wouldn’t be a lease - I’m not sure what remedy the management company could have for non-payment of the service charge given there is no lease to forfeit.2024 wins: *must start comping again!*0
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