Service Charges on new build developments

Nymbus

DCFC79 said:

buel wrote: »

Wow! We are looking at a new build that has a maintenance charge and I’m paranoid about it!!

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.

But why would anyone want to pay an extra charge when the majority off freehold houses in England do not have to?

Nymbus

nik_k said:

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

Is there not an important principle here? If people refuse to buy these houses with charges then the system will collapse and councils will again adopt the estates. 

Nymbus

NeilCr said:

buel wrote: »

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.

To be honest while I, completely, understand your concerns I can't see any developer guaranteeing how much service charges will increase by. There are sometimes "unknowns" - we had an ongoing problem a couple of years ago with an electric gate which busted the budget for the year.

Have you asked the developer if there is an intention to pass/sell the freehold to the residents on completion? We own the freehold of our estate so have control of service charges, appointing a managing agent and running the whole show. We are very conscious of limiting any increase in service charges as much as we can - as we have to pay them!

This is for a freehold house on a mixed site of flats and houses

ETA - we have a private road which won't be adopted but costs us little to maintain. We do employ a gardener as there are a lot of trees, plants, flowers on the estate. His wages plus the electric gates and managing agents fees make up the majority of my service charge

I think the issue is that this should not be happening and councils should adopt these. 

Nymbus

eidand said:

davidmcn wrote: »

No, it is correct, please reread what I said. It is not a fee for the services you use. It just goes into the pot for whatever the council decides to spend money on (and most of that pot comes via central government funding anyway). Those services include adopted roads. It doesn't mean the council has to adopt the road you live on.

In any event, everybody does use adopted roads, even if they don't happen to live on one.

Most of that stuff is irrelevant to my point.

My point is that you pay the full council tax, in addition to maintenance fees. Do you not see the problem here? You are forking out more for the same thing, plus the additional responsibility

I entirely agree and I would NEVER buy on a managed estate! 

If people stop buying these homes then the managed fee system would stop! 

avawat20

Nymbus said:

eidand said:

davidmcn wrote: »

No, it is correct, please reread what I said. It is not a fee for the services you use. It just goes into the pot for whatever the council decides to spend money on (and most of that pot comes via central government funding anyway). Those services include adopted roads. It doesn't mean the council has to adopt the road you live on.

In any event, everybody does use adopted roads, even if they don't happen to live on one.

Most of that stuff is irrelevant to my point.

My point is that you pay the full council tax, in addition to maintenance fees. Do you not see the problem here? You are forking out more for the same thing, plus the additional responsibility

I entirely agree and I would NEVER buy on a managed estate! 

If people stop buying these homes then the managed fee system would stop! 

Well people are never going to stop buying them, especially when they offer more incentives for first time buyers and things like money towards deposits/part exchange etc. People have different level of tolerances - we've viewed houses and think how the hell do people live like this?! But they do and more people will. It will become more common, the more houses that are built. As long as the owners have a say then there is much lower risk of ridiculous increases.

headpin

Nymbus said:

eidand said:

davidmcn wrote: »

No, it is correct, please reread what I said. It is not a fee for the services you use. It just goes into the pot for whatever the council decides to spend money on (and most of that pot comes via central government funding anyway). Those services include adopted roads. It doesn't mean the council has to adopt the road you live on.

In any event, everybody does use adopted roads, even if they don't happen to live on one.

Most of that stuff is irrelevant to my point.

My point is that you pay the full council tax, in addition to maintenance fees. Do you not see the problem here? You are forking out more for the same thing, plus the additional responsibility

I entirely agree and I would NEVER buy on a managed estate! 

If people stop buying these homes then the managed fee system would stop! 

The point is that many developments would not get planning consent unless the developer agrees to provide open spaces, play areas and the like. It is part of the planning conditions.

The Local authority will then not adopt these areas and the developer includes in the sale contract a requirement that purchasers will contribute to the maintenance of these areas. The adoption of the road may or may not form part of that process.  Usually most estate roads will be adopted, it is unusual for them not to be.

What is important to determine is the status of the Management Company. Often The purchasers will become Members and will have the power to make their own Director appointments. So effectively they will control the company and the fees that it charges. But you need to satisfy yourself of these as part of your pre-contract enquiries. 

So far as Council Tax is concerned you are legally obliged to pay. You pay regardless of what services you use or are provided. There is no abatement for not having kids at school, using social service or the library., etc. Bit like say gym membership; you pay the same whether you go everyday, twice a week, once a month, etc. And whether you use all the facilities or just say the pool. 

NeilCr

Nymbus said:

buel said:

Wow! We are looking at a new build that has a maintenance charge and I’m paranoid about it!!

We rejected the idea. Why would anyone buy a freehold house and pay an additional fee? To my mind it’s unacceptable. 

I bought one because it was by far the best house for me in the best location in the town I wanted to move to. I got a parking space, too - parking is incredibly tight here and for some houses I viewed I was told I'd have to park in the local multi storey.

We own the freehold and the residents manage the estate, set the service charges etc. It's a nice peaceful estate which is well looked after.

I fully accept it's not for everyone. My OH likes the house but has the same views as others on "managed" estates. Nevertheless, the residents here are happy and content with what they have 

HanPop

Nymbus said:

nik_k said:

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

Is there not an important principle here? If people refuse to buy these houses with charges then the system will collapse and councils will again adopt the estates. 

How will the council magic up the money to look after the green spaces on new build developments?? It’s all well and good saying that if people don’t buy new build houses that the council will have to pay for them but the money has to come from somewhere.
Also someone else mentioned that it was harder to get a mortgage on a property with a management company/service charge attached - this is my second new build property and there has never even been mention of an issue and we’ve had a mortgage with Nationwide and now NatWest.

Nymbus

avawat20 said:

Nymbus said:

eidand said:

davidmcn wrote: »

No, it is correct, please reread what I said. It is not a fee for the services you use. It just goes into the pot for whatever the council decides to spend money on (and most of that pot comes via central government funding anyway). Those services include adopted roads. It doesn't mean the council has to adopt the road you live on.

In any event, everybody does use adopted roads, even if they don't happen to live on one.

Most of that stuff is irrelevant to my point.

My point is that you pay the full council tax, in addition to maintenance fees. Do you not see the problem here? You are forking out more for the same thing, plus the additional responsibility

I entirely agree and I would NEVER buy on a managed estate! 

If people stop buying these homes then the managed fee system would stop! 

Well people are never going to stop buying them, especially when they offer more incentives for first time buyers and things like money towards deposits/part exchange etc. People have different level of tolerances - we've viewed houses and think how the hell do people live like this?! But they do and more people will. It will become more common, the more houses that are built. As long as the owners have a say then there is much lower risk of ridiculous increases.

It seems people do indeed have different levels of tolerances and I simply will not tolerate being fleeced! I pay more than enough in council tax and this requires legislation to stop this! 

Nymbus

headpin said:

Nymbus said:

eidand said:

davidmcn wrote: »

No, it is correct, please reread what I said. It is not a fee for the services you use. It just goes into the pot for whatever the council decides to spend money on (and most of that pot comes via central government funding anyway). Those services include adopted roads. It doesn't mean the council has to adopt the road you live on.

In any event, everybody does use adopted roads, even if they don't happen to live on one.

Most of that stuff is irrelevant to my point.

My point is that you pay the full council tax, in addition to maintenance fees. Do you not see the problem here? You are forking out more for the same thing, plus the additional responsibility

I entirely agree and I would NEVER buy on a managed estate! 

If people stop buying these homes then the managed fee system would stop! 

The point is that many developments would not get planning consent unless the developer agrees to provide open spaces, play areas and the like. It is part of the planning conditions.

The Local authority will then not adopt these areas and the developer includes in the sale contract a requirement that purchasers will contribute to the maintenance of these areas. The adoption of the road may or may not form part of that process.  Usually most estate roads will be adopted, it is unusual for them not to be.

What is important to determine is the status of the Management Company. Often The purchasers will become Members and will have the power to make their own Director appointments. So effectively they will control the company and the fees that it charges. But you need to satisfy yourself of these as part of your pre-contract enquiries. 

So far as Council Tax is concerned you are legally obliged to pay. You pay regardless of what services you use or are provided. There is no abatement for not having kids at school, using social service or the library., etc. Bit like say gym membership; you pay the same whether you go everyday, twice a week, once a month, etc. And whether you use all the facilities or just say the pool. 

But by signing a contract one also becomes legally obliged to pay the management fee. This is unacceptable and the cycle needs to be broken. I believe that this is an intolerable situation and needs to be stopped.