Non responsive management company on new build estate/rentcharge issue.

Troy_af

Hello.

I am in the process of purchasing a property on a new build estate (property itself is previously owned however), which is subject to an estate rentcharge. I was originally hoping to complete soon, but due to this issue we are having big time delays. I've came here for some advice because at the moment I am not getting answers from my solicitor, the developer or the management company. Its like nobody really knows what the hell is going on.

So long story short the estate is not yet complete and because of this the management company has not been fully handed over to yet, therefore they do not have any details regarding how much the fees will be, what work it is exactly that they are going to carry out or for what areas they are even responsible. All of this information should be contained in a management pack, which I as the buyer should receive... at some point. It starting to come to light now that this management company do not have these "packs" and it is also proving very difficult to even contact this company. Without this pack I'm not sure I can even buy the house. I know of one buyer already on the estate who has pulled out due to not receiving this pack and my solicitor has even said that they will need to confirm with my lender whether they are willing to take out some kind of indemnity insurance because of this, which sounds even more worrying.

This is all starting to sound very dodgy to me now. Ive researched the company who the rentcharge is payable to and they are not a well know management company who are usually responsible for new build estates by the big developers (greenbelt, trinity, etc come to mind). The company in this case seem to be some kind of real estate company who does not have any kind of website or contact details of any kind, gov.uk company information states that the nature of business is "Other letting and operating of own or leased real estate". I can only imagine that this company own the land and they will then contract out any required work/maintenance to other companies.

It has been going on so long now that I'm starting to expect that I probably wont be getting any more information and I will ultimately be told my by solicitor that it is my decision to proceed given what we know. I'm fully aware of the whole new build "fleecehold/rentcharge" scam that has came up over the last few years - unregulated companies with uncapped fees etc. This home unfortunately seems to fall into the fleecehold category. I was prepared to take the risk but now I am not so sure and I'm seriously considering pulling out. Its not an easy decision because I do believe this could be my dream home.

Any advice would be appreciated, especially those who have bought on these estates with rentcharges and can share their experiences.

Thanks.

dimbo61

If you can't get any information from the developer, management company or your own solicitor why do you think we might have the answers !
I understand NEW Rent charges are to be banned from June/July this year but what about existing Rentcharges ?

Thrugelmir

Your choice as whether to wait or pull out. Sometimes wheels can grind very slowly forwards. 

GixerKate

There was something similar on the estate where I live, we are currently in the process of having the management company being set up however in the meantime a neighbour of mine has sold their house (after being in it for 18 months) and the new buyer is struggling to get the management pack.

In our case, the buyer decided to carry on without the management pack however we are set up where the management company will be run by people who live on the estate and is connected to the residents association rather than an independent third party.  Would you have the same set up?  If not then I would also have serious doubts.

Troy_af

dimbo61 said:

If you can't get any information from the developer, management company or your own solicitor why do you think we might have the answers !
I understand NEW Rent charges are to be banned from June/July this year but what about existing Rentcharges ?

I believe that may be ground rent related to lease hold?

Troy_af

GixerKate said:

There was something similar on the estate where I live, we are currently in the process of having the management company being set up however in the meantime a neighbour of mine has sold their house (after being in it for 18 months) and the new buyer is struggling to get the management pack.

In our case, the buyer decided to carry on without the management pack however we are set up where the management company will be run by people who live on the estate and is connected to the residents association rather than an independent third party.  Would you have the same set up?  If not then I would also have serious doubts.

Apparently, according to residents on the estate, they do not have the option for the residents to make up the management company. I don't think we even have any rights to remove the company or even question their charges and ask for invoices etc..

GixerKate

Troy_af said:

GixerKate said:

There was something similar on the estate where I live, we are currently in the process of having the management company being set up however in the meantime a neighbour of mine has sold their house (after being in it for 18 months) and the new buyer is struggling to get the management pack.

In our case, the buyer decided to carry on without the management pack however we are set up where the management company will be run by people who live on the estate and is connected to the residents association rather than an independent third party.  Would you have the same set up?  If not then I would also have serious doubts.

Apparently, according to residents on the estate, they do not have the option for the residents to make up the management company. I don't think we even have any rights to remove the company or even question their charges and ask for invoices etc..

That is more the norm I think about new builds.  That would make me pretty nervous and the house would have to be an amazing house for me to take that risk.  On the otherside though, many people are very happy in new builds with a 3rd party management company in place, you just don't hear from them as often as people who are unhappy.

Troy_af

GixerKate said:

Troy_af said:

GixerKate said:

There was something similar on the estate where I live, we are currently in the process of having the management company being set up however in the meantime a neighbour of mine has sold their house (after being in it for 18 months) and the new buyer is struggling to get the management pack.

In our case, the buyer decided to carry on without the management pack however we are set up where the management company will be run by people who live on the estate and is connected to the residents association rather than an independent third party.  Would you have the same set up?  If not then I would also have serious doubts.

Apparently, according to residents on the estate, they do not have the option for the residents to make up the management company. I don't think we even have any rights to remove the company or even question their charges and ask for invoices etc..

That is more the norm I think about new builds.  That would make me pretty nervous and the house would have to be an amazing house for me to take that risk.  On the otherside though, many people are very happy in new builds with a 3rd party management company in place, you just don't hear from them as often as people who are unhappy.

I was aware that it was the norm but I was not aware of how shady these management companies can be. I mistakenly thought that major housing developers would hand over completed estates to well know reputable management companies. It has now become clear to me after weeks of research that they actually, in some cases such as mine, hand them over to extremely dodgy companies. I was aware that this is currently unregulated and the government know it is an issue, but I did not realise it was indeed this bad.

I have now received my "management pack". It is a joke, it genuinely looks like it has been knocked up by some teenager in their bedroom, basic spelling mistakes including the name of the developer etc, figures for estimated costs clearly just made up out of thin air. The company was set up a couple of years ago by a nobody and has no experience or history whatsoever of managing estates.

I am still waiting on further enquiries, but I am now looking with around 95% certainty to pull out. Heads up to anyone in a similar situation to do your research, because without naming names this is one of the biggest housing developers in the country.

Listlad

@Troy_af

What is the name of the management company?

We are in our 4th week of waiting. Paid £312 to HML / Beehive for the management pack for our house. So we can send it to our buyer’s solicitor. They made a mistake and applied the money to a property in a different part of the country with a similar address.