New housing development service charges

ChristineMartin

I know this has been mentioned before but I have stumbled across another issue. I was exploring equity release to help my daughters get on the property ladder. I don't have a mortgage and my new build detached house is freehold. The developer is about to handover to Remus - Mgmt and there is 'no-cap' on their charges. This means absolutely no equity lender will touch this. Can we as a resident association 'block' the appointment Remus? Or is there another way of getting a clause put into the contract that rises in fees should be inline with inflation or something similar? I have been told that this can also affect sale prices.

daveyjp

As a freeholder your rights to avoid paying charges you contractually agreed to when you bought the property are very limited.

Managing companies need to recover all the costs of providing the services so they won't agree to caps on increases.  What if one year there is a need to spend thousands on an unplanned maintenance issue?

These charges are potentially onerous and the covenant in place is a financial burden which is why mortgage providers are wary of them.

ChristineMartin

I think it is fair if there is work that needs doing or items that need replacing, they cannot predict this. We are talking about their 'Management Fee'. This is over and above any work carried out. A management fee is usually between 10-20% of work carried out. It is how the escalation of this specific charge which is in question.