Freehold charges cost us our dream home

davidmcn

gary83 wrote: »

Why would the developer agree to the terms being changed? What’s in it for them to change the terms for this one house on the estate?

Indeed. The whole point of these schemes are that they're self funding with the terms being consistent across the development. If you end up with a shortfall because one house had special exemptions or caps, what's going to happen? Hope that the neighbours will volunteer to make up the difference?

daveyjp

davidmcn wrote: »

Indeed. The whole point of these schemes are that they're self funding with the terms being consistent across the development.

How do you know without seeing and understanding the contract that this is what will be achieved?

You can guarantee any agreement drawn up by the developer's solicitor will favour the developer. You wouldn't buy a house without a solicitor and accept the terms put forward by the sellers side.

The rent charge agreements are potentially even more onerous.

davidmcn

daveyjp wrote: »

How do you know without seeing and understanding the contract that this is what will be achieved?

You can guarantee any agreement drawn up by the developer's solicitor will favour the developer. You wouldn't buy a house without a solicitor and accept the terms put forward by the sellers side.

No, of course. But the point generally about service charges is that they're meant to run long after the developer has left the scene. They're not going to work if everyone has individually-negotiated terms.

jaybeetoo

This isn’t new. If you own a house on Bourneville Trust (set up by George Cadbury in 1900) then you are required to pay a community / stewardship / management charge. I suspect the difference is your house can’t automatically be repossessed if you are 40 days late in paying your bill.

daveyjp

Bournville Trust will be leasehold properties.

These cases are freeholders with a non negotiated non regulated side agreement to pay whatever is demanded by the management company.

jaybeetoo

There are freehold and leasehold properties on Bourneville Tust.

gary83

daveyjp wrote: »

Bournville Trust will be leasehold properties.

These cases are freeholders with a non negotiated non regulated side agreement to pay whatever is demanded by the management company.

It’s non negotiated because it’s a simple take it or leave it decision, this couple had the choice to buy any house they chose one on a new build estate knowing the council weren’t going to adopt & pay for communal facilities so the cost had to be met by the residents of the estate. By their own admission they were aware of this;

“We bought our house [in Oxfordshire] back in July 2016 and we were informed by the estate agent there'd be a service charge which, coming from London, we weren't worried about," Peter says.”

If they didn’t want to pay the service charge they agreed to then they should have bought a different house, it’s not news or a scandal.

GDB2222

jaybeetoo wrote: »

This isn’t new. If you own a house on Bourneville Trust (set up by George Cadbury in 1900) then you are required to pay a community / stewardship / management charge. I suspect the difference is your house can’t automatically be repossessed if you are 40 days late in paying your bill.

I gather that the repossession is not permanent, just temporary until you have cleared the debt. Does anyone know whether this has actually occurred, or is it purely theoretical?

Flugelhorn

I gather from one we are looking at the moment that lenders are requiring deeds of variation to be informed if there are defaults on service charge payments and also to remove the s121 which allows repossession before they will lend on the property.

SouthLondonUser

The problem I have with these charges is that homeowners have, realistically, no control over them and no recourse if they increase too much or if the company takes the money but doesn't do a proper job.

I have no issue paying for a good job. I do have issue when I have no say whatsoever.

Google 'fleecehold' and you'll see lots of such cases.

In fairness, however, I'd say that the average Joe can be forgiven for not fully understanding the difference between the management charge for a leasehold property, and the fleecehold charge for the maintenance of common spaces. It is the solicitor's job to explain that.