Fleecehold

[Freddie1980]

What a surprise the most expensive item is Management fee, also wtf is an estate sinking fund ?

We had a sink fund on the block flats I was living at. The idea is to put money aside to cover any major expense or servicing item. This could include fixing damaged stair cases, replacing security doors, fixing the roof etc.

 

[Caracus2k]

Estate management fees and the whole thing around leaseholds are huge cons.

About 7 years ago the wife and I were looking for a new place and starting looking at a lot of new builds.

It was always hillarious to watch the sales staff get flustered when I raised whether the premises were leasehold (they all were at the time), how much of would cost to buy the freehold and what was the situation around estate fees.

It was obviously deliberately avoided early on on the sales process to snag unaware people into at least emotionally becoming commited to buying a property before some small print was thrust in front of the buyer to sign....

Many companies offered to sort out the solicitors firms for buyers as well which was obviously a conflict of interest.

Ended up buying an old house and renovating it instead.

 

[Caracus2k]

But no. Lets go make a legal mine field. And apparently a lot of pension funds are involved in the long term so it's going to be tough to unpick.

The leasehold costs being able to double every decade on a lot of these houses meant that although the gains were small to start with the long term profits would be huge.

A bit like the single grain of rice on the chess board doubling every square scenario.

Was an obvious total rip off. People paid hundreds of thousands of pounds for houses and were being quoted £30 - 40k to buy thr freehold on their own property because the building company had made a tidy profit in thr background selling the freehold on shortly after finishing on site!

As has already been mentioned the sting in the tail is that it would make some of these addresses very hard if not impossible to sell on as mortgage companies wound not want to lend to customers taking on such onerous costs after down the line.

 

[Kainz]

'My one-bed flat's service charge is now £16K a year'

Londoners hit by rising service charges speak out as MPs urge changes to shared ownership schemes.

www.bbc.co.uk

Latest article on the BBC. 16k a year is sickening.

Wife and I have a 1 (can be 2 really) bedroom in Stanmore Hill, Middlesex. We pay a touch over 1k a year however we've had 2 clown management companies in the past 2yrs and both were dreadful. As of 2024 we've got a new one who seem to be more transparent with regards to what are charges are used for. However a large number of us aren't paying yet until we get answers on things like the cleaning frequency of this building, and the state of our bin stores. We've got so many european folks renting in the building now and they are so lazy with disposing of rubbish - they don't even put them in the bins, they just dump them outside.

 

[Goodie]

As an example of the mismanagement that can go on with these scams, this was a letter received out of the blue a year or two ago. For which they've only just managed to get repaired and still haven't finalised how much they're planning on fleecing us for. It came to light after this letter than the waste pump unit should have two functioning pumps, so if pump A fails pump B takes the load. It was evident that pump B never functioned, as evidenced on 3 years worth of service reports, so when pump A went pop the only answer was to tanker it. The management company denied responsibility for not acting upon the service reports, they felt it was the job of the company that provided the service. Also evidenced on the repoets was the lifting mechanism to bring the pumps to surface were also broken on all service reports, again ignored when it was an easy fix so that when it went pop drainage was the only answer. Also the companies listed to do the drainage were from companies +3 hours drive away, hence the costs.



The farcical company that we have in place is Trinity Estates, any positive review listed there looks highly suspicious to me.

 

[drakioned]

I'm also caught by fleecehold, ~£7k service charge for nothing special, no gym or swimming pool or anything fancy. Service management company hasn't produced accurate accounts for the past 2 years and was billing us on estimates and is only getting around to do some of the accounts now.

 

[mattyfez]

It really sucks.
I avoided lease holds and 'managed' properties like the plague when I was buying..

The law should really be changed retrospectively although that would be very problematic.

I can understand it with a block of flats or whatever.. But a stand alone house it should be illegal, as in if there's only one property on a particular patch of land /footprint then full ownership of the land should be included in the deeds.

 

[Freddie1980]

'My one-bed flat's service charge is now £16K a year'

Londoners hit by rising service charges speak out as MPs urge changes to shared ownership schemes.

www.bbc.co.uk

Latest article on the BBC. 16k a year is sickening.

Wife and I have a 1 (can be 2 really) bedroom in Stanmore Hill, Middlesex. We pay a touch over 1k a year however we've had 2 clown management companies in the past 2yrs and both were dreadful. As of 2024 we've got a new one who seem to be more transparent with regards to what are charges are used for. However a large number of us aren't paying yet until we get answers on things like the cleaning frequency of this building, and the state of our bin stores. We've got so many european folks renting in the building now and they are so lazy with disposing of rubbish - they don't even put them in the bins, they just dump them outside.

From my own experience the best approach is to let leaseholders who live in the property manage themselves. When being run by owner occupiers you tend to get people who care and are more diligent and take responsibility. The trouble is finding people who want to take on this responsibility, recently retired professionals are ideal for this but most people don't want the hassle and get a managing agent to do all the donkey work for them. With little to no oversight that's when things can go really wrong.

 

[Freddie1980]

It really sucks.
I avoided lease holds and 'managed' properties like the plague when I was buying..

The law should really be changed retrospectively although that would be very problematic.

I can understand it with a block of flats or whatever.. But a stand alone house it should be illegal, as in if there's only one property on a particular patch of land /footprint then full ownership of the land should be included in the deeds.

It would help if there was a regulator in place who sets out industry guidance for this sort thing that way everyone knows what they should and shouldn't be paying for and know when to ask questions when expenditure exceeds the guidelines.

Ultimately though people need to take on the responsibility on holding these companies to account. I know it's a hassle but it's there property at the end of day.

 

[Steeps]

It wouldn't be so bad if the estates looked like Centerparcs, but it's the council planning departments which insist on so many houses per acre, the design strategy and the tiny back gardens with large open spaces between properties to reduce overlooking. If planners went back to allowing housing with a driveway for 2 cars and a front garden then there would be less open space needed to be privately maintained and shared land owned by the developer to sell on as part of someone's pension plan.

There's a fantastic case ongoing here where an industrial estate expanded to have a through road with a lovely 90deg bend to really increase the wear rate due to HGV's turning. The developer refused to hand over the land and used it as a ransom on any further development, charging all the units a maintenance fee for the road. They refused to maintain it and it's now pothole city, now it's unaffordable to maintain and needs a full resurface they tried to get the council to adopt it, who refused due to the poor state it was in. They formed another company owned by themselves, sold the road asset to it for nothing and now winding it up to get out of paying to resurface it, while pocketing the cash they've had from the units paying the service charge to maintain the estate.

 

[Hotwired]

From my own experience the best approach is to let leaseholders who live in the property manage themselves. When being run by owner occupiers you tend to get people who care and are more diligent and take responsibility. The trouble is finding people who want to take on this responsibility, recently retired professionals are ideal for this but most people don't want the hassle and get a managing agent to do all the donkey work for them. With little to no oversight that's when things can go really wrong.

I wouldn't be surprised if it was straight up illegal to dissolve a central responsibility for a block of flats and hope the individual units cooperate on keeping the building maintained.

 

[mattyfez]

It would help if there was a regulator in place who sets out industry guidance for this sort thing that way everyone knows what they should and shouldn't be paying for and know when to ask questions when expenditure exceeds the guidelines.

Ultimately though people need to take on the responsibility on holding these companies to account. I know it's a hassle but it's there property at the end of day.

The properties will become unsaleable... So eventually the only people who 'buy' the rental will be people who are really desperate.

 

[ProStreet]

The properties will become unsaleable... So eventually the only people who 'buy' the rental will be people who are really desperate.

Exactly. If you want to be in financial ruin for the rest of your life, buy a leasehold.
The amount of stress relief I got from selling mine in 2022 was crazy. If I waited until now, I'd be a further £40k down, on top of the £30k I had already lost buying it in 2017.

 

[Jono8]

Just moved out of our new build (freehold house). These estate charges/councils not adopting them are the biggest drawback.

I mean, it isn't a massive amount of money over a year, but as you point out, they keep creeping up. Ours started at just over £300 and 5 years later was £450....

What I find most bizarre is that there is no council tax discount. It feels like you are just paying twice for something as the council aren't doing any upkeep for the roads, trees, public bins and lights etc etc but you are still paying them as though they are.

 

[mattyfez]

Just moved out of our new build (freehold house). These estate charges/councils not adopting them are the biggest drawback.

I mean, it isn't a massive amount of money over a year, but as you point out, they keep creeping up. Ours started at just over £300 and 5 years later was £450....

What I find most bizarre is that there is no council tax discount. It feels like you are just paying twice for something as the council aren't doing any upkeep for the roads, trees, public bins and lights etc etc but you are still paying them as though they are.

Well.. Exactly.. It's a total scam and it should be illegal for residential property.

 

[ProStreet]

Just moved out of our new build (freehold house). These estate charges/councils not adopting them are the biggest drawback.

I mean, it isn't a massive amount of money over a year, but as you point out, they keep creeping up. Ours started at just over £300 and 5 years later was £450....

What I find most bizarre is that there is no council tax discount. It feels like you are just paying twice for something as the council aren't doing any upkeep for the roads, trees, public bins and lights etc etc but you are still paying them as though they are.

Of course they will increase in line with RPI at least. Anyone buying one of these should know that when buying the property (and that's partly the job of your solicitor).

Another issue with leasehold flats is heating. They usually have communal heating, which of course means the price cap does not apply.
I was paying 30p per KWH for heating (typical 7p). The managing agent and freeholder sting you in every direction possible.

Want to sell the place? £1000+ of made up fees
Want to rent out the place? £1000+ fees, plus ongoing costs every time you let out the property to new tenants

One thing is for certain, I will never buy a flat or leasehold in the UK again. It is too much stress.

 

[andybird123]

aren't doing any upkeep for the roads, trees, public bins and lights etc

do you literally never leave your estate? You do still have the ability to use all the local amenities in your council area, that's the whole point of council tax, it pays for the roads/parks etc for the whole town, not just your street, even the waste management charges will be going towards the local tip

 

[drakioned]

do you literally never leave your estate? You do still have the ability to use all the local amenities in your council area, that's the whole point of council tax, it pays for the roads/parks etc for the whole town, not just your street, even the waste management charges will be going towards the local tip

I mean, I don't think anybody is proposing that no tax should be paid, but given clearly a block of 200 apartments is going to be a lot easier on some council services than 200 individual houses, why is that not reflected?

The other joke is when cladding impacted apartments are valued at £0 for mortgage purposes but somehow still have band E+ council tax.

But council taxes are generally a bit of a joke anyway - my house costs more and clearly costs the council more but is banded below my apartment in the same council, and both are greater than houses with double of number of bedrooms further up the country.

 

[Shoza]

As an example of the mismanagement that can go on with these scams, this was a letter received out of the blue a year or two ago. For which they've only just managed to get repaired and still haven't finalised how much they're planning on fleecing us for. It came to light after this letter than the waste pump unit should have two functioning pumps, so if pump A fails pump B takes the load. It was evident that pump B never functioned, as evidenced on 3 years worth of service reports, so when pump A went pop the only answer was to tanker it. The management company denied responsibility for not acting upon the service reports, they felt it was the job of the company that provided the service. Also evidenced on the repoets was the lifting mechanism to bring the pumps to surface were also broken on all service reports, again ignored when it was an easy fix so that when it went pop drainage was the only answer. Also the companies listed to do the drainage were from companies +3 hours drive away, hence the costs.



The farcical company that we have in place is Trinity Estates, any positive review listed there looks highly suspicious to me.

Question is should the pumps be failing now - How old are they? Service charges should be used for regular prevention maintenance and future replacement but big ticket items like that should have 10+ year guarantees. There was a case I was involved I regarding lifts at a new build block that broke down constantly and the charges weee being levied on the leaseholders. It was fought at Tribunal and deemed not to be a service charge item because the lifts were less than 2 years old and shouldn’t have needed anything more than basic annual service. In the end the lift company paid to replace them entirely.

 

[Jono8]

do you literally never leave your estate? You do still have the ability to use all the local amenities in your council area, that's the whole point of council tax, it pays for the roads/parks etc for the whole town, not just your street, even the waste management charges will be going towards the local tip

I'm not saying I wouldn't expect to pay council tax. I do think a small discount to reflect that the area I live in hasn't been adopted by the council and is being funded by the estate homeowners would be fair.