Local Initiatives
Management Companies – A Quick Guide for New Home Buyers
Homeowners on some housing estates in Bishop’s Tachbrook might pay charges for managing and maintaining shared areas, such as roads and open spaces. These charges are usually known as ‘estate rent charges’ and are typically payable annually. The requirement to pay will be set out in documents signed by the homeowner before they move into their property.
Currently, homeowners have limited rights to challenge these charges if they do not consider them to be reasonable. The government is committed to improving the rights of homeowners living on these estates.
We recommend all prospective buyers of new-build homes ask the developer whether a management company or the District Council will maintain the site before completing the purchase.
Developments, Management Companies and Managing Agents
Freehold estates are private and mixed-tenure estates where, unlike other residential areas, shared areas and facilities are not owned or maintained by the local council.
Ownership and management will rest with a commercial organisation. This might be a private provider or the homeowners themselves as part of an ‘estate management company’.
In some cases, the management company will employ a managing agent to carry out or oversee maintenance, upkeep, or repair.
What to Expect
Homeowners living on freehold estates pay towards the management and maintenance of communal areas or services. Homeowners are required to pay a management company, which will be responsible for carrying out such work, or employing a managing agent to do so on their behalf.
The cost homeowners pay will depend on several factors. This includes the types of facilities or services to be maintained and the number of properties required to contribute. In our experience, we find that an annual fee of £200 is not uncommon.
There is no discount from Council Tax to take account of estate rent charges. The amount of Council Tax each household pays is not adjusted to reflect the specific services they receive. It is collected to deliver a broad range of services across the wider local community.
Any homeowner who is unhappy with how their shared areas or facilities are managed, or considers they are paying too much, should seek their own legal advice on how to proceed. They may need to apply to the county court.
Do I Have to Pay Estate Rent Charges?
Whether or not estate rent charges should be paid is determined by the developer, not by the Council. The requirement to pay will be set out in legal documents signed when the property is purchased. During the home-buying process, prospective buyers and their legal representatives should check this information to ensure they understand the ongoing costs involved in owning their home.
Home buyers should seek independent legal advice if they believe they did not receive relevant or important information about their new home at the time of sale.
Having Your Say in the Running of Management Companies
Upon completion of the development, the maintenance of the estate transfers from the developer to the management company. Typically, the developer will have already appointed a nominal director to the management company board and will also have nominated a managing agent to administer the collection of estate rent charges and control the maintenance.
To gain better transparency of this arrangement, have a say in how the estate is maintained, and to understand, challenge, and potentially control costs, the Parish Council recommend that at least one resident on the development is appointed as a sole or co-director.
The Parish Council has extensive experience with management companies and managing agents. We engage with residents to support and guide them on how to get the best service and value for money. In parallel, your local MP is working hard to advocate that the current practice be discontinued, and that ultimately, all developments should be council-managed.
If you have any questions or concerns about management companies, estate charges, or your rights as a homeowner, please feel free to contact the Parish Council for advice and support at clerk@bishopstachbrook.com.
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