BRITS have been warned to watch out for 'rip-off fees' when buying newbuild homes.
The law allows developers to hand over public spaces such as green areas and parks to management companies, who can charge residents fees for services such as lawn mowing.
Residents who have bought the freehold to their new home can also be subject to the fees. This has led to concern that some developers are selling "fleecehold" rather than freeholds.
Now Cheshire East council is being urged to look at ways to protect new buyers from being caught in the so-called fleecehold trap, reports Cheshire Live.
A report to Tuesday’s economy and growth committee stated that, when purchasing a newbuild property, potential owners are advised if there is a charge to maintain the open space on the estate or parts of the estate infrastructure which is not adopted by the council.
It continues: “This is predominately on freehold properties, but leaseholders can also be charged a fee on top of their ground rent and service charge.
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"The charge on freeholder properties is bound to the property thorough the title deeds and unlike leaseholders, who can challenge through a tribunal, there is no dispute resolution available to freeholders.”
Cllr Laura Crane, who proposed the motion, told the committee: “Residents move into a newbuild estate, they buy their house which is freehold, they own the land it is placed on but they are tied into management fees which they have little to control over.
“They find themselves starting off perhaps paying £100 a year and 10 years down the line find themselves paying £1,000 a year and this is where the problems arise.
"You can choose how much you pay to have your lawn mowed if you choose to have somebody else do it, you don’t have the same say when it comes to mowing the open space outside of your home, yet you still have to pay it otherwise you risk losing your property because they will take you to court for those fees.”
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The economy and growth committee voted to ask the environment and communities committee to investigate any opportunities to deter developers from creating so-called fleeceholds where this is within the remit of Cheshire East Council.
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