Estate Management Fee

05DavLew

Myself and my partner have really had an offer accepted for a freehold new build that was built in 2020 and we are the second owners of the house. We have been informed that there will be a £270 estate management fee for the maintenance of the estate which we are fine with but we were wondering how do we know that this fee cannot just increase by large amounts each year and we have no choice but to pay it? we also worried that we would be demanded to pay random amounts when if there was major damage to the estate that was not covered by the each households £270. Does anyone have knowledge into how likely increases are on this and whether it is possible for large amounts to be demanded?  

DE_612183

It will probably depend on the management company - we have one here but we also have residents on "the board" so any increases have to be managed, saying that in a recent storm the playground got wiped out and the costs were goign to be shared ( vai the management fee ) but luckily enough the council stepped in an footed the bill out of some other money they had from the developer.

jlfrs01

I wouldn't worry too much - this isn't the same with a Leasehold property where you not only have a management company to contend with but also the Leaseholder and that's where big bills can really pile up based on bitter previous experience! This is likely to cover managing any public areas and paths so nothing like the sort of risk associated with buying a flat in a large complex for example.

player1_2

One advantage of paying such a fee is it provides assurance that common grounds will be maintained. Some estates suffer from overgrown pathways and parkland,

daveyjp

05DavLew said:

Myself and my partner have really had an offer accepted for a freehold new build that was built in 2020 and we are the second owners of the house. We have been informed that there will be a £270 estate management fee for the maintenance of the estate which we are fine with but we were wondering how do we know that this fee cannot just increase by large amounts each year and we have no choice but to pay it? we also worried that we would be demanded to pay random amounts when if there was major damage to the estate that was not covered by the each households £270. Does anyone have knowledge into how likely increases are on this and whether it is possible for large amounts to be demanded?  

The amount can be arbitarily increased, unlike leaseholders the freeholdershave very few statutory rights to negotiate the amount charged or refuse payment.

As regards major expenditure you need to know what the residents are liable to pay for.

Some estates it may be cutting an area of grass, others can be repairs and maintenance of roads, pavements, parking areas, drainage, streetlighting, significant landscaping, water features, security systems (on one of our local estates it also includes costs associated with a community centre!) which may be OK now the estate is new, but in a few years significant funds may be required.

BobT36

Look up the negatives of "Fleecehold". I wouldn't go anywhere near a house with one of these charges, personally. 
You pay that, AND council tax, lol. 

Just another modern day "never being able to own anything after purchase and must keep continuously paying, forever" thing..

NameUnavailable

Estate management fees are uncapped and unlike leasehold charges you cannot challenge them via the First Tier Tribunal.

That said, look at what is covered and what do you think could need attention in the future? If there are elaborate grounds or poorly maintained roads, then I'd give it consideration. If it's relatively small areas of grass and 'normal' roads then I wouldn't worry too much.

You maybe don't want childrens playgrounds (cost to upkeep/renew and insure), or fountains, electric gates, or lots of trees.

GDB2222

On some estates, the maintenance is under control of the house owners. That means that everyone has an incentive to keep the costs down. 

However, there may be some essential infrastructure like a sewage pumping station that the estate is liable to maintain. If that needs expensive maintenance, the house owners will need to pay whatever it costs.

BobT36

I keep seeing these sewage pumping stations being listed everywhere and charges to maintain them. Forgive me for being ignorant, but how did all the houses built over the last century go on, and who pays for the sewage works for those? Isn't that just done via the water companies? Why is it different for these newer builds? 

Noneforit999

We had one of these charges on our previous house.

I recall the first year was £150 ish
By year 5 we were paying over £400 a year. 

eddddy

BobT36 said:

I keep seeing these sewage pumping stations being listed everywhere and charges to maintain them. Forgive me for being ignorant, but how did all the houses built over the last century go on, and who pays for the sewage works for those? Isn't that just done via the water companies? Why is it different for these newer builds? 

As you probably realise, the background is...

• Sewers are generally built under roads
• If the land slopes, so that new houses are built below the level of the road...
• Or if the new houses are a long way from the road, and there isn't enough gradient for sewage to flow under gravity to the sewers...

• Then a sewage pump is required to pump sewage into the sewer under the road.

In the 'old days', houses in that situation would probably have had a 'cesspit' (maybe one per house, or maybe shared) - a large underground tank for collecting and storing the sewage, which has to be emptied into a large tanker lorry periodically.

Or maybe a 'sceptic tank' - an underground tank where sewage is collected and is allowed to decompose, before being drained into a soakaway in the garden.