What you need to know before you buy a home on a new housing estate
If you are buying a home on an estate for the first time and it was built within the last 15 years or so, you may not be aware that you need to know if an estate charge applies. We have invited campaign group HorNet to tell us what this is and why it matters!
November 29, 2018
The vast majority of new build housing estates constructed in the last 15 years have not been put up for adoption by the local authority either in whole or in part. This means all the roads and shared public spaces (parks and other green areas) have not been passed onto the local authority to manage and are instead being held the responsibility of a private company.
As a result, these estates are not adopted by their local council and aren’t maintained by the council tax the residents are being charged. Instead the residents on these estates have to pay a separate charge for maintenance to a private company. While the agreement to manage the estate in this way is usually written within the legal deeds and acceptable under property law, homebuyers are never consulted and have no consumer rights of redress.
Why does this matter?
Well, first up, the charges that a private management company can charge are uncapped and unregulated.
Secondly, unadopted areas are often constructed to a lower standard leaving estate residents with bigger maintenance bills from the word go. Residents’ requests for a breakdown of costs and a demonstration of how their money is being spent is hard to obtain and/or often sees them paying over the odds for a basic service.
Thirdly, as news stories pour out in the press of residents of such estates suffering unfair charges, future home buyers are likely to be put off these new homes on estates, affecting their long term value and saleability.
What do I need to watch for when buying a house on a new estate?
Make sure you know what you’re letting yourself in for and as early in the process as possible. Start by asking the estate agent and developer’s sales office the following questions and ideally, getting answers – with detail – in writing (email is fine) :
- Is the whole of the estate going to be adopted by the council/water company when it is completed?
- If not, which parts will remain in private ownership?
- Has the developer agreed with the council to maintain any adjacent areas of public open space?
- What arrangements are in place to maintain unadopted areas into the future?
- Is there a Residents’ Management Company which will take control of the unadopted areas when the estate is completed?
- Is there a cap on the estate charges and/or a limit to annual rise in costs?
- Is there a dispute resolution process, and if so, what is it?
- What standards are used for the construction of the estate roads, footpaths, sewers, play areas etc. and what process is in place for handover from the developer to the management company?
- Is there an independent inspection before handover?
- Are there any guarantees or indemnities against defects in the construction of the estate?
With thanks to HorNet – the Home Owners Rights Network- for this advice. Please visit their site for some great advice and shared experiences from other homeowners campaigning for a better deal for homeowners on privately managed estates.