Management/ Service charges on new build

overthewall

We are looking to purchase a house on a new Redrow development and like many others have been surprised to find a freehold property has a service/ estate charge which has no control on the future charges. The roads and sewerage say they are "adoptable" not adopted and therefore can we assume that, in the long term, we become liable for resurfacing roads, sorting out issues with sewerage, gritting, tree management, replacing the play areas etc etc as well as cutting the grass and all smaller items. Does anyone know of a plan to regulate these charges? I wonder if we are worrying unnecessarily so are keen to hear from people who have more experience - Many thanks

daveyjp

Ready made thread of potential issues:

https://forums.moneysavingexpert.com/discussion/6674770/barrett-redrow-freehold-property-on-land-maintained-by-firstport-what-rights-do-homeowners-have

mlz1413

I live in an estate built and run by Orbit, it's 10 years old and the service charges haven't gone up on a yearly basis but you do get the odd and extra demand for overspend. Last year was £2.42, but I haven't been here long enough to know what is normal.

I believe that in the past (pre COVID) the council adopted all the roads after estates were completely finished. But now with councils having no money they are refusing to adopt. But that means they are run by the builders, so I guess that means you need to understand your management pack.

Houses on my estate sell really quickly so I don't believe the management charges out off many people.

mta999

Redrow are likely to appoint Firstport to manage the estate - if they do.you are in for a whole sea of expensive pain....

RelievedSheff

https://forums.moneysavingexpert.com/discussion/6677177/management-service-charges-on-new-build

Read the transfer documents very carefully. They will have a plan which shows which areas will be adopted by the local authority, which areas will be adopted by the water authority and which areas the management company will be responsible for maintaining.

We live on 7 year old Harron Homes development with an estate management charge. The roads and sewers are not adopted yet but are to be adopted. The developer remains responsible for these until they are adopted and had indemnified residents against the costs of any repairs while they remain the developers responsibility.

The management company is responsible for the play area and some small greens scattered around the development.

Our annual service charge is £167. Last year it was £168. It has not really changed since the management company took control of the green spaces. Our management company seem to be very proactive and the estate is very well maintained, much more so than the adjacent local authority managed sites, so we don't mind paying the charge.

Will they be regulated in the future. I doubt it and until local authorities are forced to adopt the green spaces that their own planning authorities insist upon then management companies are here to stay Im afraid,

Section62

https://forums.moneysavingexpert.com/discussion/comment/82078091#Comment_82078091

I believe that in the past (pre COVID) the council adopted all the roads after estates were completely finished. But now with councils having no money they are refusing to adopt. But that means they are run by the builders, so I guess that means you need to understand your management pack.

This goes back much further than 2019. And the original shift towards non-adoption wasn't driven by money (in the sense of councils saving) but rather that developers wanted (or needed) to provide facilites to non-adoptable standards. Either to generate more profit (cheaper materials, more units/ha, less S106/S38, ongoing income from owners) or to make the development more upmarket (expensive materials, gates, exclusivity).

It is also a bit of a myth that councils have no money. There are some councils genuinely near bankruptcy, but most have plenty of money - they just make choices (some beyond their control) about the way the money is spent, and maintaining roads and green spaces is often very near the bottom of the list (hence the 'pothole crisis' and 'flooding' of roads).

If they wanted to adopt roads and green spaces councils could generate additional income through S106 payments and/or payments to cover future maintenance costs.

Another issue is parking. Developers and councils wanted fewer parking spaces per dwelling, which meant people were more likely to park on the estate roads, which themselves were not really designed to accommodate parking. Some councils realised that managing parking on these roads would be problematic, and sensibly decided it would be better if the problem was someone else's to deal with.

https://forums.moneysavingexpert.com/discussion/6677177/management-service-charges-on-new-build

Does anyone know of a plan to regulate these charges?

There are calls for more regulation and also for full adoption of estate roads and green spaces.

More regulation is certainly possible, but regulation doesn't always make things better and also comes with additional costs.

Personally I doubt there will be mass-adoption of roads and green spaces. Whilst a case can be made that people's council tax should cover the costs, the fact is these roads and green spaces weren't provided with the intention of them being adopted and are of variable quality. I suspect the situation will become similar to the 'WASPI' one - there will be a fair degree of support from the general population, the media, and some politicians, but when the decision-makers get to see the very big number at the bottom of the 'costs' report they will decide that another review or inquiry is needed in order to kick any decision well into the future.

There is also the issue that unlike private sewers (which nobody really cared about), private roads and open spaces do give residents more control than if they are public. People who've paid extra for a gated development are unlikely to be happy when the council arrive to take down the gates. Similarly, people who've been able to park freely on their private street are going to be inconvenienced when the council turns up to paint yellow lines all over the place, and start charging residents for a CPZ permit. Adoption sounds a simple solution, but in reality will be very un-simple.

eddddy

Regarding regulation of Estate Management Charges for freehold homeowners...

Under the Leasehold and Freehold Reform Act 2024, freehold homeowners will be given the same statutory rights that leasehold property owners currently have.

The act has received Royal Assent, but it isn't expected to be implemented until 2027.

So, for example, freehold homeowners will be able to challenge the reasonableness of Estate Charges at a tribunal.

And where major works will cost each homeowner more than £600, the Estate Managers will have to go through a consultation process with the homeowners. (The limit is currently £250 for leaseholders)