Estate Management and Fees

What is a management company?

A management company is responsible for managing services, including roads and green spaces on developments. 

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What is the role of a management company for new build developments?

Management companies take care of the service charge, as well as the delivery of management and maintenance services for a development. In most cases, it will deal with the maintenance of any shared areas such as footpaths and landscaping, and maintenance of grass and open spaces.

The exact obligations of the management company will be specified in the property transfer documentation – it may vary from development to development.

When the estate is small, it is more likely that the owners of each property will take a share in the management company and collectively run it. This option gives the property owners more control on expenditure.

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Can the cost of a management company increase annually?

It is very unusual for a transfer to state fixed management fees, therefore the cost of management/maintenance can be included within the definition of the service charge. This may vary annually, according to the cost incurred, and it can be increased. There is, however, a requirement for costs to be reasonable and any increase should reflect the costs the management company incur.

Each property owner on the estate will pay an annual management fee for services which will vary between estates depending on the size, location and services provided

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Will the management company affect my sale if I choose to sell the property in the future?

When you come to sell, there may be a restriction on your property title in favour of the management company. This means that you will need the management company’s consent to sell the property. This will normally only be provided if all fees are paid and up to date.

The purchaser will also need to comply with all obligations and enter into a covenant with the management company when taking over the property. The management company will detail all of the buyer’s requirements in the management pack. Please note that the purchaser may be required to pay notice fees on completion.