PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Freehold property with rent charge instead of service charge

Options
Aqua26
Aqua26 Posts: 44 Forumite
First Post
in House buying, renting & selling
H Folks, I have been in process of buying a freehold property which is built about 4 years ago by one of v well known builder in UK housing market - my solicitor has raised a 'hot potato' topic of property associated with having 'Rent Charge' - The management company assigned by builders company collects service charge for maintaining areas around property and have referred the term to 'rent charge' instead of service or maintenance.

Despite of my solicitor trying for last 2 months to address this issued, Seller's solicitors are not cooperating at all towards Short deed of variation in reference to 'rentCharge' term to be replaced with 'Service charge' or 'Maintenance charge' and in fact proposed buying indemnity insurance policy at sellers expense (£90 Premium for life) ...

Lastly my solicitor has written to my mortgage lender for checking if they will accept with this scenario and reached out to me asking if I am willing to proceed --

Reading about rent charge etc etc is making me anxious and concern and I have been losing sleep over this - Any help / information will be appreciate !!! Thanks in advance :eek::eek::eek:
«13

Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    Options
    What advice has your solicitor given?
  • daveyjp
    daveyjp Posts: 12,527 Forumite
    First Post Name Dropper First Anniversary
    Options
    It doesn't matter what it is called, the devil is in the detail of the charge.

    As an unregulated area of law the issues are how it is calculated, what you are paying for and more importantly how disputes are resolved. I.e what if the charge is suddenly increased by a huge amount, work being charged for isn't carried out etc etc.

    You are right to be wary.
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    First Anniversary Name Dropper First Post
    Options
    The estate managers are very unlikely to change it.

    You have a straightforward choice - accept it or buy a different property, one which isn't part of a privately-maintained estate. Because somebody's got to pay to maintain those common areas and roadways...
  • Aqua26
    Aqua26 Posts: 44 Forumite
    First Post
    Options
    davidmcn wrote: »
    What advice has your solicitor given?

    he has suggested to get vendors to get it changed - however vendors have proposed buying indemnity insurance policy as changing deeds and all is v time taking etc
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    Options
    Aqua26 wrote: »
    he has suggested to get vendors to get it changed - however vendors have proposed buying indemnity insurance policy as changing deeds and all is v time taking etc
    Ok, but what's his advice about proceeding by way of the indemnity policy? It would make more sense to seek advice from your solicitor (which is what you're paying him for) rather than try doing your own research and getting anxious about it.
  • Aqua26
    Aqua26 Posts: 44 Forumite
    First Post
    Options
    davidmcn wrote: »
    What advice has your solicitor given?
    AdrianC wrote: »
    The estate managers are very unlikely to change it.

    You have a straightforward choice - accept it or buy a different property, one which isn't part of a privately-maintained estate. Because somebody's got to pay to maintain those common areas and roadways...

    v confusing situation it is..
  • Aqua26
    Aqua26 Posts: 44 Forumite
    First Post
    Options
    do you know what will be implications - is it the time or money which is making it difficult or just the management company which do not want to accept it at all ?
  • jbainbridge
    jbainbridge Posts: 2,014 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    Options
    Very unlikely the vendors can change the situation. And I'm not sure what an indemnity would achieve.

    You on the other hand can buy it accepting the charge .. or walk away. Your solicitor has done well to point out the shortcomings of the property .. up to you whether you listen.
  • Richard_Webster
    Richard_Webster Posts: 7,646 Forumite
    First Anniversary First Post Combo Breaker
    Options
    If the property is freehold the only way a service charge can be collected for maintenance of shared items such as private drives, gardens etc is by means of a rent charge so there is no way this can be changed to something else.

    The more important issue is finding out what maintenance is carried out, what is expected in he future and what the costs have been and are likely to be in the future. Are they putting money aside each year for some major cost that may not occur for some years, but will be big that year?
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • Aqua26
    Aqua26 Posts: 44 Forumite
    First Post
    Options
    Richard_Webster wrote: »
    If the property is freehold the only way a service charge can be collected for maintenance of shared items such as private drives, gardens etc is by means of a rent charge so there is no way this can be changed to something else.

    The more important issue is finding out what maintenance is carried out, what is expected in he future and what the costs have been and are likely to be in the future. Are they putting money aside each year for some major cost that may not occur for some years, but will be big that year?


    thanks yes all looks good - its just the rentcharge word itself which my solicitor has mentioned that should be changed - we got the house and we loved it since day one also sellers had their first sale fell through and needed a quick which even got them accepting a lower offer of 10K from ourside - we are near to exchange in 2 -3 weeks and now my solicitor has raised it that he is not getting any response back from the sellers about this issue !!!! :( he has also written to my lender (one of very popular high street bank) about checking on their preference if they are willing to proceed with having indemnity policy in place !!!:eek:
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.3K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608.1K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 248K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards