Service Charges on new build developments

Joanthebone

Well they would say that, wouldn't they?:rotfl:

RelievedSheff

Joanthebone wrote: »

Well they would say that, wouldn't they?:rotfl:

I personally am more inclined to believe a legal professional then a random person on the internet.

I'm pretty sure they would not risk putting something in writing that isn't true given their profession.

nik_k

FWIW, we're purchasing a new build, and, although subject to a rent-charge, this does not cover the roads as these will be adopted by the local authority. Therefore, the whole issue of service charges etc needs to be considered on a development by development basis, as what's included/not included will vary

davidw123

My wife and i bought a new build from Barratts in August 2019. We picked a new build because despite people suggesting they are over-inflated on price, other 4 bed houses in the area were pretty much within the same region and we got a right bargain (so whilst this thread is on service charges, make sure you bargain BEFORE reserving and exchanging) if your at this point. (We got 10K towards our deposit, free flooring throughout, 1.6K cashback for appliances).

Our broker was quite surprised we were able to get this as the maximum they are able to discount is 5% before banks get uneasy.

Our area like many has a few council houses that are for "affordable housing" and a POS green space which we all have to pay for to a managing company. The roads, the drains etc have all been adopted by the council. This is currently £125.00 a year.

Its important to note though you do not pay this charge UNTIL the entire site is completed, and as residents we have complete control over who we choose to manage this as a company. So if prices go up too much we will just vote to get rid. Our system is that we all form part of a LTD company and have have nominated residents to directly control this process and keep ontop of costs.

I have found on a new build site, everyone is in the same boat and gets on, is friendly and chats, and so don't think this would ever become an issue. I have lived in three different places across 8 years and very rarely spoke to a neighbour... the new build estate is a huge improvement.

:beer:

ccbrowning

I’m in a small development of 12 houses and this has been a nightmare. The company set up before all the houses were sold is shoddy and can’t manage a spreadsheet. However, it’s been run by the residents soon - been paying £256 for basically a private road and insurance!

Sachs

RelievedSheff wrote: »

We used a solicitor from the developers recommended panel and it was made quite clear from the out set, by both the developers and the solicitors, that the solicitors did not get commision from the developers.

It's actually not about the kick back, thats really secondary.

Do you want a solicitor that asks the awkward questions and fights hard for your best interests? Is the developer going to recommend a solicitor to their customers who asks the awkward questions and fights hard against their position?

Imagine the conversation at the solicitor's: hey boss, this new clause that housebuilder plc has started inserting is pretty bad for our clients, should I rock the boat?

Boss: We get £300,000 a year of work from housebuilder plc in referrals... Can't you just bury it in the small print somewhere?

buel

michelle230 wrote: »

Do lots of reseach. Ask lots of questions. Get everything in writing. Above all, do not use the developer`s "recommended" solicitor. Employ your own solicitor who ought to look very carefully through the lease/deeds and explain all ongoing financial commitments.
You may be lucky or you may end up unlucky if you don`t get everything explained and in writing. (Things like will the council be adopting the estate).
Many people have been told things by the sales staff which have turned out to be untrue.

Interesting!! Just spoke to the Developer and they simply won’t confirm that the charge won’t rise ‘exponentially’ (the word I used to them). Obviously they said it won’t but also won’t be drawn on my very simple concern - that it, theoretically, could rise massively and impact on the ability to sell further down the line.

buel

DCFC79 wrote: »

Why are you paranoid about it ?

Have you asked what the fee covers ?

If the local authority dont adopt the road then the management company take care of the green spaces, any pot holes that appear.

Thanks but I understand what it’s for but my paranoia stems from stories I’ve read where the charge rises beyond anything that could be considered reasonable and, therefore, makes it difficult to sell on.

buel

Update; the developer has told us they do not yet have the specifics of the maintenance fees but sent us a PDF of a similar agreement on one of their other developments.
Essentially it states that if there is ‘a dispute between the company and the owner as to the amount or proportion of the service charge, such dispute shall be referred to the surveyor who shall act as an expert and not as an arbitrator and whose decision shall be final and binding on the parties PROVIDING ALWAYS that the owner shall not withhold payment of the service charge where there is a dispute and such dispute shall only be referred as above after payment by the owner of the sums due in accordance with the schedule’.

Doesn’t sound too good, does it?

GDB2222

buel wrote: »

Thanks but I understand what it’s for but my paranoia stems from stories I’ve read where the charge rises beyond anything that could be considered reasonable and, therefore, makes it difficult to sell on.

If the service charge looks rather low, that may be because the developer is subsiding it until all the properties are sold? I’d expect that an estate with roads and a bit of green space could easily cost say £500 a year to maintain. If it’s less than that, budget for it increasing.