Freehold management fees

Joeeamer

Hi all,

Yes that question again but I would be very grateful for guidance. We moved into a new property last summer which is freehold but like many estates these days has a legal obligation to pay an annual service charge to a residence company. Homeowners have an equal share in this company but a maintenance company has been employed to oversee and manage contracts for a fee. I initially did not have a problem with this but after seeing the issues that some of you have had, I am nervous.

Our fee goes towards green spaces, bins and general upkeep of shared space. All roads are adopted. The current responsibilities lie with the house builders but this is due to hand over to the company. Either way the upkeep is poor.

As we all moved in together our neighbours and ourselves all get on really well and we have even started a good neighbour group to discuss future planning etc.

We would like to take on the management of the estate ourselves. This will involve setting up a not for profit organisation with a directorship I would imagine but this would give us full control of fair management without the need for extortionate management fees. For example the green spaces are not kept well and are more nettles than grass making this unusable space. The landscapers are told to simply cut it and do no treatments. Without the fees we could employ a landscaper to do a much better job with no rise in payments (I’ve checked!)

As our house builder has yet to transfer the management to the management company I feel this is our only chance to get this sorted.

Is this possible, what would we need to do?

Many thanks for your help.

da_rule

Unlike leasehold, there is no statutory right of management for freehold properties in these situations.

All you can do is ask the shareholders of the company to appoint your new company once the contract with the current one comes to an end.

Joeeamer

Is this the case if the current contract has yet to have started?

comeandgo

We keep the management company and they collect the money from all the residents. You say you are all friends at the moment. What about in 3 years time when people move. What would you do if only half the residents were willing to pay?
We also need insurance for the open areas, if someone was to injure themselves and sue the residents. There is more to it than cutting grass.
Once the developers are off your site, then you control the management company. You tell them what you want done. If they charge a lot, get rid of them and take another one in.

da_rule

Joeeamer wrote: »

Is this the case if the current contract has yet to have started?

Yes, you have no universal right to take on the work yourselves. Check your share holding information. These scenes are usually heavily balanced in the house builders favour. I’ve seen schemes where the builder has 99% of the shares with the other 1% being divided by home owners. This means that in reality the home owners have no control over the company.

Also, management companies have been known to offer incentives to builders in order to appoint them.

You could all approach the builders and offer to buy the open spaces off of them for a nominal fee (and set up a company in order to do this). This would completely dissolve them of their liability so they might be interested.