Many new homeowners often ask the question “Why do I have to pay towards an estate or courtyard maintenance charge?”
The answer to this question and their legal obligations in relation to this matter should have been explained to them prior to purchasing their new home by their own legal conveyancer.
The Conveyancer/Solicitor acting for the purchaser should have gone through all this as part of their legal due diligence but time and time again, it would seem that this important point is not mentioned at all despite the Conveyancer /Solicitor often collecting the initial estimated service charges as part of their completion funds towards purchasing a new home.
The simple answer to this question is often that when Local Authorities agree to and approve new developments, many of them along with the key utility providers (for mains water and sewage) do not wish to add all the new communal roadways, courtyards, open spaces, play grounds or utility services equipment to their own portfolio of responsibilities, even though they have often set planning conditions requiring that the new estate must have green open spaces, suitable levels of car parking and public play areas as conditions of the planning approval.
As a result, house builders when faced with this dilemma of a local authority who will not adopt these areas will often set up a specialist estate management company which has the legal responsibility to oversee the management, maintenance and replacement of these areas and infrastructure services. The costs of these services are then charged to the home owners on these estates, with costs being estimated for the year ahead and then divided up amongst the contributing homes.
Homeowners on these developments often have the opportunity to become members of this residents estate management company and can be elected by their neighbours to become a Director of these specialist estate companies once all the homes have been built, sold and the legal transfer of the ownership of the land and specialist equipment is transferred to the members estate management company.
Many of these resident estate management companies will usually continue to use the services of a specialist managing agent to oversee the legal and financial administration of the estate management company who are well versed in the Health & Safety and legal aspects of managing such areas.
To find out more about the responsibilities of an estate management company, we recommend reading the ARMA guide to Houses paying towards estate charges.