New Build Estate Charges and Shared Facilities — Managing Agent Fees on New Developments

Buying a freehold house on a new build development does not mean you're free from ongoing management charges. Many new developments include shared facilities — roads, green spaces, play areas, drainage infrastructure — that are not adopted by the local authority. Managing these falls to a management company, and the costs are passed to all homeowners through an estate management charge.

What Are Estate Management Charges?

Also called estate maintenance charges or residents' management charges, these are annual fees payable by all homeowners on a development to fund the maintenance of shared facilities. They apply to freehold owners as well as leaseholders.

Typical charges: **£200–£800/year** for a house on a standard development. Higher-specification developments with more elaborate shared facilities (gym, concierge, water features) can be £1,500–£3,000/year.

What These Charges Cover

• Maintenance of unadopted roads and footpaths
• Communal landscaping and green spaces
• Play equipment inspection and maintenance
• Street lighting (if not adopted by the council)
• Surface water drainage management
• Management company administration costs and profit

The Critical Point — Freeholders Pay Too

A common misconception is that estate charges only apply to leasehold properties. **This is wrong.** Even if you own the freehold of your house outright, if the development has shared facilities, you are liable to contribute to their maintenance. This is enforced through a covenant registered against the title of your property.

Before purchasing, your solicitor should review the estate charge covenant and provide an estimate of the current annual charge.

The Leasehold and Freehold Reform Act 2024 — New Rights

The 2024 Act introduced new protections for those paying estate management charges:

• **Right to challenge unreasonable charges** at the First-tier Tribunal (Property Chamber)
• **Right to request information** about how charges are calculated and what they cover
• **Right to manage** — freeholders on qualifying estates now have the right to take over management from the developer's management company (similar to the existing leasehold Right to Manage)
• Budget transparency requirements — management companies must provide clear accounts

What to Do Before Purchasing

1. Ask your solicitor to identify whether the development has unadopted shared facilities and any associated management charge covenant

2. Request the current annual estate charge and the most recent accounts

3. Ask who manages the development and review any available homeowner reviews of that company

4. Check whether there is a residents' association on the development — existing residents are often willing to share their experience

If the Management Company Goes Bust or Performs Poorly

If the management company becomes insolvent or performs inadequately, homeowners can apply to the First-tier Tribunal to appoint a new manager. Under the 2024 Act, the right to manage process for freehold estates is also available.

Document all correspondence with the management company and store estate charge accounts in your Property Passport UK — future buyers will need to understand what they're committing to before purchasing your property.