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buffness
Posts: 233 Forumite
Evening All,
After some advice if that’s okay please?
Yesterday, my partner and I paid £1000.00 to reserve a new build on a Bellway Home development.
When we were going through the paperwork, the sales advisor told us that the property was freehold but then said that there is a management charge that is estimated to be £100.00 per year. This is paid to maintain the area (grass cutting etc)The paperwork further states that ‘Bellway are providing this for guidance only’ - the management company Bellway use are ‘Residentidal Management Group’
After reading reviews online, we are now having second thoughts. Firstly, Bellway have said this is an estimate but people are saying that prices have drastically increased year on year with no recourse as the ‘contract has been signed’. Even worse; the company are increasing prices when they aren’t even doing any work.
What I don’t want to be faced with is the above - I will be asking our conveyancing solicitor to impose that they amend the clause to something more specific (for example, paying up to a maximum of...)
Has anyone ever experienced this?
The sales advisor at Bellway verbally told us that ‘the charge will only increase in line with RPI’ which is obviously not true as this isn’t actually mentioned in the paperwork so I’m not sure where she got this from (sales pitch perhaps...)
Any advice/help is greatly appreciated. Any other advice on Bellway new build homes is helpful too
Thank you
Vijay.
After some advice if that’s okay please?
Yesterday, my partner and I paid £1000.00 to reserve a new build on a Bellway Home development.
When we were going through the paperwork, the sales advisor told us that the property was freehold but then said that there is a management charge that is estimated to be £100.00 per year. This is paid to maintain the area (grass cutting etc)The paperwork further states that ‘Bellway are providing this for guidance only’ - the management company Bellway use are ‘Residentidal Management Group’
After reading reviews online, we are now having second thoughts. Firstly, Bellway have said this is an estimate but people are saying that prices have drastically increased year on year with no recourse as the ‘contract has been signed’. Even worse; the company are increasing prices when they aren’t even doing any work.
What I don’t want to be faced with is the above - I will be asking our conveyancing solicitor to impose that they amend the clause to something more specific (for example, paying up to a maximum of...)
Has anyone ever experienced this?
The sales advisor at Bellway verbally told us that ‘the charge will only increase in line with RPI’ which is obviously not true as this isn’t actually mentioned in the paperwork so I’m not sure where she got this from (sales pitch perhaps...)
Any advice/help is greatly appreciated. Any other advice on Bellway new build homes is helpful too
Thank you
Vijay.
0
Comments
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The charge is to maintain the estate (could go up if people wan dog poo bins which need emptying for example) The house can still be a freehold. A lot of newbuilds do this as the area needs to be maintained.
If the council ever adopt the roads/grass areas then it would reduce/diminish. However they adopt less and less these days.0 -
I have a lot of experience of this. Here's what I wrote on another thread:When we were going through the paperwork, the sales advisor told us that the property was freehold but then said that there is a management charge that is estimated to be £100.00 per year. This is paid to maintain the area (grass cutting etc)The paperwork further states that ‘Bellway are providing this for guidance only’ - the management company Bellway use are ‘Residentidal Management Group’
After reading reviews online, we are now having second thoughts. Firstly, Bellway have said this is an estimate but people are saying that prices have drastically increased year on year with no recourse as the ‘contract has been signed’. Even worse; the company are increasing prices when they aren’t even doing any work.
What I don’t want to be faced with is the above - I will be asking our conveyancing solicitor to impose that they amend the clause to something more specific (for example, paying up to a maximum of...)
Has anyone ever experienced this?
The sales advisor at Bellway verbally told us that ‘the charge will only increase in line with RPI’ which is obviously not true as this isn’t actually mentioned in the paperwork so I’m not sure where she got this from (sales pitch perhaps...)
I am chair of a residents association on a small estate of freehold properties. The private road that leads to all the houses is not owned by us, instead the developer has kept the freehold and we pay a property management company to maintain the common areas. Here's a number of things you need to be aware of:
- There will be an agreement you will sign as part of the transfer of land that will outline the terms of the maintenance agreement. This will describe what the management company will do, what responsibilities you have, and how they will charge for their services. You need to read this carefully to understand what you are letting yourself in for.
- The £100 is as you say, an "estimate" of the annual charge. They will be charging you for whatever they think they can get away with. The way our agreement works is the management company charges a 15% management fee on top of the actual costs for things like grass cutting and other maintenance, so ours tries to get away with charging us anything they can to bump up their management fee.
- Look closely in your agreement at how the management fee is calculated and escalates. The property management companies try to use these as a license to print money.
- Unlike leasehold properties, you have no right to buy the freehold of the common areas. You can form a residents association (we did) but you cannot form a residents management company and take over running the common areas (like leasehold tenants can). There's no way a developer will sell you the freehold on common areas as it is a license to print money, and you cannot take over the running of them.
- We have had serious issues with our property management company in recent years. They have been overcharging us and doing various things wrong. We have had to take them to the Property Ombudsman twice to get them to adhere to our management agreement and to correct overcharges.
Bottom line - you could be letting yourself in for years of escalating charges and poor service. Make sure you read the management agreement closely before you complete and understand what you are letting yourself in for. Try to get to see this before you exchange as it may impact your decision to go ahead.0 -
OldMusicGuy wrote: »I have a lot of experience of this. Here's what I wrote on another thread:
I am chair of a residents association on a small estate of freehold properties. The private road that leads to all the houses is not owned by us, instead the developer has kept the freehold and we pay a property management company to maintain the common areas. Here's a number of things you need to be aware of:
- There will be an agreement you will sign as part of the transfer of land that will outline the terms of the maintenance agreement. This will describe what the management company will do, what responsibilities you have, and how they will charge for their services. You need to read this carefully to understand what you are letting yourself in for.
- The £100 is as you say, an "estimate" of the annual charge. They will be charging you for whatever they think they can get away with. The way our agreement works is the management company charges a 15% management fee on top of the actual costs for things like grass cutting and other maintenance, so ours tries to get away with charging us anything they can to bump up their management fee.
- Look closely in your agreement at how the management fee is calculated and escalates. The property management companies try to use these as a license to print money.
- Unlike leasehold properties, you have no right to buy the freehold of the common areas. You can form a residents association (we did) but you cannot form a residents management company and take over running the common areas (like leasehold tenants can). There's no way a developer will sell you the freehold on common areas as it is a license to print money, and you cannot take over the running of them.
- We have had serious issues with our property management company in recent years. They have been overcharging us and doing various things wrong. We have had to take them to the Property Ombudsman twice to get them to adhere to our management agreement and to correct overcharges.
Bottom line - you could be letting yourself in for years of escalating charges and poor service. Make sure you read the management agreement closely before you complete and understand what you are letting yourself in for. Try to get to see this before you exchange as it may impact your decision to go ahead.
Thank you very much - that’s very helpful.
Do you use RMG?0 -
This thread may help.
The OP had the same idea as you about restricting the amount of service charge she wanted to pay
https://forums.moneysavingexpert.com/showthread.php?p=755583180 -
There’s a lot about this on the HORNet’s (Home Owner’s Rights Network) website and Facebook page0
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No, we have a different management company. But RMG seem to be just as bad as them, take a look here: https://uk.trustpilot.com/review/rmguk.comDo you use RMG?
Look at the example of how a pensioner's annual fees have escalated.0 -
No, its not practical to cap the service charge for the maintenance of the communal areas shared with the other homes on the Estate/development.
The cost of any services (PI insurance, gardening, management etc) will always increase over the years.
You cant even cap it at RPI, as the level of expenditure will change. Therefore, a decent managing agent will set a reasonable budget for the year ahead. At the end of the year the accounts should be reviewed and ideally any "under spend" returned or "overspend" billed for. (the title may define how excesses or surpluses are dealt with.)
Here is a situation to consider: What if your Estate/Development has to deal with flytipping, and the culprit can not be identified. The council will not remove the debris as it is not their land. This is when the Estate Service Charge would have to step in. If the estate become a hot-spot for fly tipping (or the issue becomes reoccurring), not only will you be burdened with the repeat clearance costs, but also the residents may decide to install signage, or even CCTV. All of which would be borne by the Estate Service Charge.
Equally, there are many very well managed Estates, who are thankfully not burdened with extensive anti-social behaviour and their costs will hardly change year-on-year.
There is no magic ball which can foresee what will happen in the future. Make sure you read through and understand all your obligations. Consider the risk, and make an informed decision.
It is not always doom and gloom (otherwise nobody would buy a flat in a block or a house on an estate), just continue doing your research.0 -
This is our estate. The only thing that needs doing is some basic gardening work. However, our managing agents didn't like this because their management fee is tied to the total cost of maintenance. Thus we started finding unnecessary and unwarranted charges were being incurred by them to inflate the actual costs and thereby increase their management fee.InterestedParty2018 wrote: »Equally, there are many very well managed Estates, who are thankfully not burdened with extensive anti-social behaviour and their costs will hardly change year-on-year.
The only way to control this is to stay on top of the property management company and scrutinise all their charges and annual accounts, which takes time and effort. Things have definitely got worse in the last few years.
However, I would agree with InterestedParty2018 and say it's not all doom and gloom. Like he/she says, make sure you know what you are letting yourself in for and be prepared to spend time each year making sure you are not paying for things you should not.
If you want to buy a new house on a large development by one of the big developers, you have to accept this is the way things are right now. Which is one of the reasons we are not buying a new house on a development built by a major developer right now (we are in the process of downsizing). We are actually buying a new build on a small development of three houses in which we will own the freehold to the shared areas.0 -
Just a thought, is your council tax lower than on an adopted road?0
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No it's not.knightstyle wrote: »Just a thought, is your council tax lower than on an adopted road?0
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