New Property Freehold Management Fees

hollie.weimeraner

We're thinking of moving to Lincoln (area) and although we don't particularly want a new build we don't want to discount them either.  The only issue seems to be they all have management fees attached amounting to around £150 per annum with no indication of what the ongoing charges are likely to be. Speaking to the agents they all say that all new builds now incur these fees as the council refuse to carry out the maintenance that the charges are for.
Is this a collusion by the council as they're still charging council tax but not providing all the services normally associated with it?

princeofpounds

It's not collusion - this is down to the councils.

It's a very common policy of councils now that they refuse to 'adopt' new development. They are very happy to take the council tax and Section 106 development payments, but they can shrug off the obligations. 

Personally I think it's quite wrong, as it effectively creates a two-tier council tax market, but it's legal so they do it. They choose to spend the money they save on other things, like diversity advisors or whatever ;-)

The developers would probably prefer that their estates were adopted - the houses would be easier to sell and more valuable. There have been some instances where they have used it as an opportunity to gouge homeowners by overcharging the management organisation for the services provided, but not in all cases - some management organisations are run perfectly well. Others are handed over to residents to control. 

The reason you can't get any indication of ongoing charges is that they are service fees - they charge will reflect the work that's necessary and that will vary from year to year. However, it's general to assume that they will rise significantly. A brand new estate doesn't need much maintenance, and you'll often find that the developer is indirectly subsidising things by keeping the estate in good condition while they are still on site and selling phases.

hollie.weimeraner

Yes collusion was the wrong term they're basically abdicating some of their responsibilities.  Until central government step in with legislation it will continue unfortunately.

daveyjp

Cutting grass on private land isn't a statutory duty for local authorities, so no abdication of duties whatsoever.

davidmcn

Council tax is (as the name suggests) merely a tax, not a charge for services (in the same way that you're not getting a tax discount because you don't have kids to educate or haven't made much use of the NHS).

JamoLew

The majority of that money will be to pay an employee of the management company to administer the management as well

You will also be liable for all repairs etc to the roads and infrastructure

We have such and arrangement and I would actually stay way away from this type of arrangement with hindsight and in the future

It's a legalised racket imo

princeofpounds

daveyjp said:

Cutting grass on private land isn't a statutory duty for local authorities, so no abdication of duties whatsoever.

Well yes, that's true. But in most cases it's not just cutting grass on a private verge or whatever. A lot of it is maintenance associated with areas where there are full public rights, such as roads.

The only reason many areas like green space and playgrounds etc. remain private is because the council will not take them on. In many cases they are still obligated to be public access however; one estate I lived on had to provide a park for the local population; residents had to pay to maintain it. That felt like a really good deal when the local chavs started smoking weed in there on a Friday evening.

So it's a technicality of a defence in many instances...

hollie.weimeraner

Yes will avoid like the plague

Racky_Roo

You need to find out if the council are adopting the roads and lighting and water co adopting the sewers. Then that normally just leaves the green areas to maintain which aren't too expensive and generally don't increase too much unless it's a huge estate with loads of open spaces and landscaping. Ones to avoid are the ones where the roads and sewers aren't being adopted