Estate Management Fee

GDB2222

Houses are now being built in low lying areas periodically subject to flooding. These are areas that previously were not considered suitable for housing. 

BobT36

I seee, so it was only rarely they built them in these locations, but nowadays it's much more common? 
Interesting. I didn't doubt they were necessary, just was wondering why they're such a "thing" now. Most of the new estates seem to have one. 

HobgoblinBT

OP, what has your Conveyancing Solicitor who is expert in these matters advised in answer to your questions?

y2graham

We were looking at a house with estate charges and decided not to touch them. The estate charges are uncapped and very often written into the deeds of the house so are then “attached” to the house. Management companies often increase the prices because they can and don’t expect work to be completed to a high standard on the estate. Estate charges cover things like roads and sewers too so if you get issues with either, you’re liable. Don’t be a “fleeceholder” in my view. 

BobT36

y2graham said:

We were looking at a house with estate charges and decided not to touch them. The estate charges are uncapped and very often written into the deeds of the house so are then “attached” to the house. Management companies often increase the prices because they can and don’t expect work to be completed to a high standard on the estate. Estate charges cover things like roads and sewers too so if you get issues with either, you’re liable. Don’t be a “fleeceholder” in my view. 

Indeed. This is one of the first things I ask before even setting up a viewing. 
I refuse to take on such a liability, just to sell myself off as a packaged "asset" to investors.. 

peter3hg

y2graham said:

We were looking at a house with estate charges and decided not to touch them. The estate charges are uncapped and very often written into the deeds of the house so are then “attached” to the house. Management companies often increase the prices because they can and don’t expect work to be completed to a high standard on the estate. Estate charges cover things like roads and sewers too so if you get issues with either, you’re liable. Don’t be a “fleeceholder” in my view. 

The ownership of the management company is important. Where I live the management company is jointly owned by the residents so the residents can decide to change the management agent, adjust the level of maintenance or buy new equipment (as has recently occurred with new benches and bins).
It also depends on what is being managed. The roads, pavements, street lighting and sewage (including pumping stations) are all adopted so the management group is only responsible for public open spaces, play parks and the surface water drainage beyond the roads.
Personally I'm happy to pay the charge because the level of amenity in terms of parks and general look of the estate is miles ahead of more traditional estates where these things are adopted by the council.

In contrast I wouldn't live on an estate where roads and sewage weren't adopted or where the management company was owned by a developer or third party.

Richard436

This thread has been quiet for a couple of years, so I’m hoping some of you might now have updates on your experiences. I’m currently looking at buying a new-build property on an estate that has an estate management fee, and I’m trying to understand what life is actually like for homeowners living with these arrangements.

After reading through the Estate Rent Charge documents for the property I’m considering, I’m concerned about how open-ended some of the obligations appear to be. There are frequent references to actions the management company can take if they consider it “reasonable,” but it’s not always clear what that would mean in practice. It’s left me wondering whether this could lead to disagreements down the line or significant fee rises or one-off larger additional amounts.  Even selling the house later on seems an expensive and problematic minefield.

I haven’t exchanged contracts yet, and the more I read about people’s experiences—both living in and later trying to sell homes with these kinds of arrangements—the more I’m questioning whether to continue with the purchase.

I’d really appreciate hearing from anyone who has gone through this recently. How have things worked out for you? Have the management arrangements been straightforward, or have you encountered issues?