New resident company, backdated fees

Frutter

Feel free to tell me i'm being unreasonable but money is tight at the moment and this is a big unexpected cost.

We moved into a nice new estate in Dec 2023. Paid the small requested estate management fee to the builder and have been waiting since then for the management company run by residents to be set up. Eventually this is happening and i thought we would have to pay the rest of the £300 initial fee that everyone had put in, then pay going forward a pro rata amount.

There have been NO costs incurred by residents up to this date. The maintenance has been done for free by the developer. Most the other resident are well off retired couples, only a few other working families. They are asking for £300 for each year totally about £750 to now or £900 to November 2026.

I dont understand why we need to pay such a large fee, its not an issue if your rich and retired but its a major issue for us.

Do i have to pay this fee?? Totally happy paying the initial £300 plus ongoing £300 per annum.

I have tried to say i'm not happy with this but am probably in the minority. Will speak to some other families when i can.

user1977

I doubt it's been set up as a voluntary contribution.

You (collectively) need to pay enough to cover whatever the costs incurred are. We don't know what those are though…

Woodstok2000

I think it depends what the money is for. Obviously you shouldn't be paying for work thats not been done, but often a chunk of the fees goes towards contingency funding for potential large future costs. You need to understand what you're paying towards before anyone can advise if its reasonable.

twopenny

Without knowing the details it sounds as if the cost was to be £300 pa. And you assumed it was being done for free without questioning it because it suited you to let it ride.

For it to come in bulk 3yrs later is horrible and not reasonable but I do think you should have questioned it sooner than this.

Or did you and they said it was free?

TroubledTarts

Have a look at the contract you signed when you bought the house.

The best thing would have been to put £25 a month away in a savings account or non tax paying product but that's gone for now but do bear that in mind going forward.

It is reasonable to go back to them and say I don't have that cash available and coming to be three years later is unacceptable and to agree a repayment plan in my opinion.

sherlock228

£300 flat rate per year sounds like funding a sinking fund rather than paying for actual costs each year.
What does the agreement say about annual increases? If silent then as a collection of residents you are stoking up a potential future problem.

a) you have lived there since 2023, at what point did you become legally subject to the resident management company contract?
b) what info were you given at that time regarding costs. Given the retrospective charge now, it would appear that any comment back then might have been vague about amount but possibly clear regarding start date of your liability
c) if finding a lump sum is difficult for you at this time then negotiate a payment plan. Sounds like you are liable for the full amount though???

ExEstateAgent

Are you sure the developers were doing maintenance for free? I don't imagine many would!

There may be arrears due to them.

Titus_Wadd

We were invoiced for maintenance by the nominal management company until our solicitor challenged because the build on site was still ongoing and so the early residents were not liable under our Ts and Cs until the site is completed. So it's worth checking with your conveyancer or a new solicitor as to the actual requirements under your deeds. Our site still isn't finished (since 2012) and we have not been billed since challenging the invoice 6 years ago. Until it's finished the activity of the builder isn't "maintenance" but this will be specific to our case because the estate road hasn't been laid yet so we can't be made to pay for its "maintenance" yet.

It's perfectly reasonable to ask the Management Company to explain what the invoice is for, and under what legal structure its payable. Let us know how you get on.

gm0

Anything like this (lumpy costs) is a nuisance or worse the unexpected bill.

But there are two lenses to apply

First - what your "agreement" says (in whatever form it takes such as leases or other deeds/agreements. The advice about when legally the site completes and transition(ed)/(s) is highly relevant. That delimits what is legitimate to "bill" subject to (expensive) legal argument if you disagree. Before getting aggressive - even if there are edges of "interpretation" to fuss over also consider the 2nd lens below.

How good the paperwork is varies considerably in practice site to site even though this should be well established after decades of this sort of stuff. Developers have little interest in the "ongoing" management arrangements that they won't be involved in.

There are working capital issues with a new "man co" of whatever sort - it has no money. If it needs to do something immediately (safety/emergency related due to an uninsured event / failure/damage) and spends money it doesn't have - then there is borrowing and interest to also find (recharge) until money is collected or the work that money would have covered - doesn't happen. Unpaid dues can contribute to this overdraft also. The sins of the few rebound on the many. Nobody loves paying overdraft interest as a service charge. Residents would normally prefer their dues getting spent on the estate not bank interest. So preventing it getting going with a billing dispute as distraction at the outset. May not be in your best interests. Choice. Consequence.

It's your choice how to play it - your site, your agreement. If it is a developer and lawyer generated mess then fussing about actions by some unpaid volunteer residents who are trying to get it sorted out - isn't a helpful contribution to getting it sorted out.

You have an equal 1/n interest or responsibility in what evolves - as a resident - this alongside your rights under the agreement whatever it is. More than one thing to consider.

The second lens

On your estate - what is this new resident company "for". What responsibilities over the short or long term is it accountable to (ultimately) spend money on. Cutting some grass, safety checking some TPO trees. And that's it? Unadopted roadways and pavements ? Other things? Electronic gates (a gated community). Carports or garages? Boundary walls/fences, or worse still retaining walls on a sloping site, related drainage, community or communal structures. How expensive could these things be to maintain, repair, replace?

Reserves is a question if not in your agreement already.

"Save up" year by year for future major repair or replace liabilities is a collective choice one way or the other if not specified explicitly by the original agreements. Sinking funds and contingency money so a "cash call" of residents doesn't happen the instant there is a need. The legal basis to agree and collect this if it is absent in paperwork is difficult.

Reserves is just pay now vs pay later for things with 10/20/30/50 year life. You get nothing for the extra money now. But you don't get the "whole bill" dropping on you in a single year - later (unknown). Because there are reserves.

In practice inflation in construction and unexpected events make a mockery of most such plans. The idea we have a list of things - say a 10k liability in year 10 and it will be 10k and on time almost never happens like that. It's an overall estimate across a sometimes long list. It won't cover all of it. 10k example turns up as 18k in year 7. Cash flow is different - early - and an 8k deficit to find.

The choice is "the whole bill randomly later" vs "some is covered by reserves". Critical is the 1/n - how many are splitting the bill. 10? 100?. What constitutes a big bill per person varies a lot.

In recent years many sites have seen costs of works double (embedded energy cost/Ukraine war) which makes their future plans subject to radical pruning (deferral) and the reserves go half as far on such work project by project as must be done.

Being an "owner" when a "tens of thousands" bill drops - for an early end of life failure or any kind of uninsured wear and tear event - for a roof, a lift, a porch, a sinkhole on a road/pavement a retaining wall - whatever the "communal " thing in context is - that's a MUCH bigger bill than the one being discussed now

For a site that chooses "minimum bills now" - consequence is random big bills later - for whoever is here then. People took a collective free ride and a risk. Do that deliberately. Or not.

I would caution you to consider your context - the stuff and the 1/n - before going all out for "lowest possible fees" now. It's a valid choice - either way.

Of course with most houses and smaller amounts of communal stuff - the risk is far lower than blocks of flats, with gates, lifts, intercoms and few flats per roof (small blocks) .

With houses the primary need is for simplicity. For clarity about the arrangement that doesn't spook lawyers and support for conveyancing when you sell. So up and running smoothly is preferred over mired in dispute and litigation. Act to this incentive.

Your estate context (as a club member) is what matters here. The scale and condition of the stuff of the estate title plan and its boundaries that goes with it.. And the threats - ground, trees, rivers, vandals - which can damage it in ways where it's nobody's problem but yours as a collective.

Frutter

Thanks for the replies.

The estate developer has paid all maintenance costs and will continue to do so until Nov 2026, they have confirmed this in writing. Then the residents management company will take over responsibility for maintaining the road, water sump and a few small areas of grass/path.

There are 30 houses which were sold at different times over the last 3 years. So some houses will pay 1 year of fees approx £300 and other 3.5 years, approx £1150. Even though the maintenance bill will only commence from Nov 2026. This is what i am trying to argue seems unfair and unreasonable.

Totally happy to pay an initial payment of £300 then a fee moving forward.

Its in our deeds that we will pay the management group £300 per annum however this has not existed and still does not exist. It is in the process of transfering over.