Freehold House but Service Charge for Parking Bays

SallyAnneBooth

Hi OldMusicGuy,

Many thanks for your wisdom, I've saved all of your points in a word document to ensure I don't forget!

It does sound like it can become very messy of the Management Company are not transparent and organised, hence why I want to explore all avenues before exchanging contracts.

From a legal perspective, do you think its possible to get the Service Charge fixed and can only rise by a pre-agreed %?

Hypothetically, lets say the seller agreed to £300 a year and it can only rise by 3% for 100 years, with no other charges payable and will remain the same even if the Management Company is sold on- As long as this is written in the Title Deeds (or wherever appropriate), do you think I am covered?

I've posed this question to my solicitors, who are taking forever to respond.

Sally-Anne

EachPenny

SallyAnneBooth wrote: »

I've had a look at the planning permission docs, and it states that the parking area "should be available at all times".......to me this suggests that if there is a charge of £300 per year then it isn't available at all times. I would have thought all costs would be absorbed in total asking price as I will own the Freehold.

In planning terms "should be available at all times" means that the parking bays need to be available to park owner's vehicles in "at all times" rather than being used for other things (like locating storage containers).

Arguably, having a form of control over the parking (such as gates) could also be part of achieving that "available at all times" requirement as it prevents use of the parking area by non-residents.

As far as the planners are concerened, the important thing is that the dwellings have the required amount of parking available and the residents don't create parking problems on nearby streets. Having to pay a management fee for that parking area (and associated facilities) isn't a planning issue*.

*ETA: Unless there is a specific condition to that effect in the planning consent (unlikely).

stator

If the fee increase was fixed, and something expensive broke, who do you think would pay for the repairs?

SallyAnneBooth

Thank you EachPenny,

Your argument makes sense to be fair, as far as I'm aware there is no special condition on the planning permission to that effect.

In that case my argument won't hold ground

Sally-Anne

SallyAnneBooth

Hi Stator,

That's a fair point, I wouldn't mind paying one-off extra costs to fix something (as long as the cost was justifiable). My main goal is to protect me from sudden increases in the yearly Service Charge.

Right now these Management Companies have no incentive to find the best value for money deal for repairs as they just pass on the cost to the residents in the development.

Sally-Anne

OldMusicGuy

NeilCr wrote: »

On both of the estates I've lived on the developer (on both occasions a small local firm) wanted rid of the freehold as they didn't want the hassle.
FWIW I wouldn't now buy on an estate where the residents didn't own the freehold.

You are right. If this is a small private development, the developer may want to sell the freehold to common areas. I assumed (maybe wrongly) that this was a major developer. Ours was Charles Church.

We are now moving to a small development of 3 houses where the developer is selling the freehold to the common areas as well. However, in the OP's case as there is already talk of management charges I would assume the developer is already going to have some kind of management scheme in place.

SallyAnneBooth wrote: »

From a legal perspective, do you think its possible to get the Service Charge fixed and can only rise by a pre-agreed %?

Very unlikely. The service charge has to be variable to cover all the costs they will incur, so they cannot say what they will be in future. Typically the management fee is added on top of the actual costs as a %age and that can escalate in line with inflation or some other method. So you will be liable for annual variable costs and an ever-increasing management fee.

Your solicitors will eventually unearth the agreement you have to sign but you might speed things up by asking the sales agent on the development to provide a copy of the management scheme for the common areas, or even approach the developer directly. They usually have a standard form of wording they use.

FWIW we didn't find out about the terms of the management scheme until we had committed financially and emotionally to the house. I would not make that mistake again. If you want to be able to negotiate the terms of the agreement you need to be prepared to walk away. If this is a development built by a mainstream developer or consists of more than a handful of houses, they are not going to let each buyer have t heir own unique agreement unless they really, really have to.

stator

SallyAnneBooth wrote: »

Hi Stator,

That's a fair point, I wouldn't mind paying one-off extra costs to fix something (as long as the cost was justifiable). My main goal is to protect me from sudden increases in the yearly Service Charge.

Right now these Management Companies have no incentive to find the best value for money deal for repairs as they just pass on the cost to the residents in the development.

Sally-Anne

To be honest I wouldn't touch it unless the freeholders had the right to self manage.
You are right and it is fairly common for management companies to rip off home owners when they have no control

SallyAnneBooth

Thank you for the knowledge shared, completely agree about the emotional and financial investment- exactly what I'm trying to avoid (albeit easier said than done!).

I'm waiting on the solicitors to unearth the said agreement.

I just meant in a hypothetical case (where somehow the developer agreed to fixing the charge and the percentage), would it be legally safe if its stated in the Title Deeds and any signed agreement with the Management Company?

I appreciate only my solicitor can answer this in due course, but wanted to throw some feelers out there to see if it can be explored.

Sally-Anne

stator

Yes, if the increase was fixed to a percentage or inflation it would make the property a safer investment.

Jono111

The flats with one parking each and you will have two parking places.
I foresee a few arguments brewing.