Freehold House but Service Charge for Parking Bays

SallyAnneBooth

Hi Jono,

Can you elaborate? It's got me nervous, do you think other residents could just park in my allocated bays?

Sally-Anne

Glover1862

Your parking spaces will probably have your plot number painted on, I wouldn't worry too much about that.

I would google fleecehold and read what comes up, also a big Facebook group where these charges have started at £200 to £300 then doubled or more in a very short period, you can't really challenge them either. I pulled out of a sale recently due to these service charges for freehold, I found a older estate which was a true freehold, everything is adapted by the council and I'm not effectively paying two councils taxes. Can you imagine trying to sell a property which has quite a high council tax to start with then you have this open ended service charge on top.

Look out for a TP1 document, it will be full of legal terms which make it difficult to understand, it's done on purpose, also be careful not to use the developers recommended solicitors, there have been lots of case where the charge has not been explained properly.

Slinky

stator wrote: »

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

This would also mean that in years where little maintenance is required, there would be no scope for a lower fee.


Personally I wouldn't touch this property with a mucky stick and would be looking elsewhere.

OldMusicGuy

Glover1862 wrote: »

I would google fleecehold and read what comes up, also a big Facebook group where these charges have started at £200 to £300 then doubled or more in a very short period, you can't really challenge them either.

This is something that has become a big issue. I've recently got involved in this because we formed a residents' association to make it easier to dispute problems with the property management company, which had noticeably increased in the last two years.

Apparently councils now like to sell off parcels of land to developers and they will avoid adopting the roads in these developments. This lowers ongoing costs for the council and allows the developers to create an asset they can leverage through property management companies. Of course it sounds quite nice when you look at a development to see that it is all private roads, sometimes with nice entrance gates. Oooh, how exclusive you think.... What you don't think about when you buy the house is the implications of the maintenance of those common areas.

We are lucky on our estate because our maintenance agreement dates back 20 years and the management fee does not have an escalation linked to inflation. Our property management company conveniently (for them) forgot this and kept increasing the management fee every year. When we pointed this out to them the director of customer services said it was the only agreement he had ever seen that was set up in this way.

My experience has made me very wary of buying any property where there are shared common areas. Freeholders have virtually no rights in these circumstances, unlike leaseholders.

Glover1862

OldMusicGuy wrote: »

Our property management company conveniently (for them) forgot this and kept increasing the management fee every year. When we pointed this out to them the director of customer services said it was the only agreement he had ever seen that was set up in this way.

That's interesting, did they refund you the additional charges they made over the years?

I think it's a big scam the way developers are selling this as the new norm, the management company directors of the one I was looking at had over 300 directorships, clearly a professional outfit with the resources to match, a few owners getting together to take legal action would have little chance and run the risk of massive legal costs if they lost, most people just accept the increases. The document that binds all this TR1 or TP1 favours the developer, they have similar rights to your mortgage company, if you don't pay they can force you out of your home.

I found even my solicitor who was not recommended by the developer generally just accepted it as normal until I did the research and they agreed, if the solicitor is getting a steady flow of clients from the developer hardly incentive to bring too much attention to it, what happens they do thier bit but late on when the buyer is already heavily invested or find 1sr time buyers with little knowledge to understand the implications.

AnotherJoe

SallyAnneBooth wrote: »

Hi Neil,

I've already been told there is no intention for Builder to sell or pass on management of the common areas to the residents. Yes it's unlikely they will agree but I will chance my arm.

Average inflation over the past 100 years has been around 5%, meaning my service charge will be £3.5k+ in 50 years time if this is used as a baseline.

Which by definition would be equivalent to £300 now. So whats your beef?

Glover1862

AnotherJoe wrote: »

Which by definition would be equivalent to £300 now. So whats your beef?

She's trying to FIX the increase so it's not more than inflation (Not that it's a good idea) Some of these service charges for freeholds have doubled or more in 2 to 3 years, you have no control over them, I assume the OP is trying to limit the charges, personally I would just ditch the whole idea and find somewhere with a true freehold.

OldMusicGuy

Glover1862 wrote: »

That's interesting, did they refund you the additional charges they made over the years?

Yes, but we had to take them to the Property Ombudsman to actually make them do it. We've had to take them to the Ombudsman again to resolve various other issues to do with overcharging. It's very time consuming, and it's a good thing that the secretary of the RA and I are both retired and have the time to do all of this.

NeilCr

We get accounts every year and if there is an underspend against the budget, we get the appropriate refund, after they have been audited.

Parking can be a bit of a lottery but we've found that residents usually stick to their own spaces especially, as mentioned earlier, if they are numbered. We sometimes have to explain the situation to tenants (we have quite a few here) as landlords and agents seem quite often forget to mention the rules - particularly if the tenants are a multiple car household!

Again, we own the freehold and employ the managing agent so we have control. We reduced the budget this year because we felt the increase was too much. I would only buy on an estate if the residents owned the freehold.

SallyAnneBooth

Hi Glover,

Yes that's correct, but I want to fix both elements.

So essentially Service Charge for Year 2 = £300 (Fixed) *1.02 (Fixed) , and then
Service Charge for Year 3 = £306 * 1.02

At least this way I can plan my budgeting and if selling on I can definitively say what the SC will be.

I appreciate this can only be agreed through the generosity of the Freeholder and any additional costs will have to be picked up by those who do not have the benefit of this agreement (i.e. been fleeced already!).

Sally-Anne