The charges payable on a freehold property can be described by many different terms, such as freehold property charges, service charges, estate rent charges and estate management charges.
However, they are a type of service charge, and encompass a range of services applicable to freehold estates. These charges may include the cost of maintaining the communal areas on freehold estates, for example. The communal areas may simply be private roads; but they can also include landscaped gardens, electric gates, street lighting, refuse areas, sewage pumps, play areas and TV aerial systems.
Freehold properties are sold by way of a deed of transfer. The transfer will contain a clause requiring a contribution to be paid. A well drafted transfer will set out exactly what items each freeholder must pay towards and when payment should be received. These charges are usually requested annually and are common on new build developments housing multiple freeholds or on older developments where the roads do not fall under local authority jurisdiction or where the properties are in the grounds of a larger property which is divided into leases.
Charges on freehold properties are sometimes not explained fully at the time of purchase and many freehold owners do not realise that such charges are applicable to their property. Sensitivity is needed in handling these types of charges and the knowledge to explain the charges and how they arise in detail. The charges will usually be only for those items from which the owners derive a benefit.
Recovering Freehold Debt
Recovering the costs of managing communal areas of freehold properties can be challenging for managing agents but arrears can quickly impact upon the effective management of the whole estate. When dealing with leasehold service charge arrears there are certain clauses that can be relied on within the lease that allows recovery to be quick and effective. However, on freehold property, arrears can be difficult to recover due to the restricted enforcement options and the fact that the owners may be unaware of their obligations. It is crucial for the efficient running of any property management company that there is a constant review of risk and credit control issues and also quick and efficient recovery of outstanding arrears.
We have an enviable track record in collecting freehold arrears. We are easy to instruct and offer a fast and efficient service nationwide. Where the deed of transfer provides for recovery from the defaulting freeholder, we are able to work on a No Recovery No Fee basis up to the point of issuing proceedings and will act on new instructions within the first 48 hours of receipt. You will be issued with regular reports showing the current status of each instruction with such data available 24 hours a day via our client portal, showing you the most up to date position on each matter.
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