An estate charge usually relates to the communal facilities of new build freehold housing estates. It can also relate to the communal grounds of leasehold blocks of flats. Either way, the estate charge contributes to making your community feel like a great place to live.

New build housing estates

You might be wondering why you have a managing agent if your home is freehold. This is how it works:

The developer who built your home also built communal facilities on your development such as parks, playgrounds, and car parks. This obviously varies between different estates, some have extensive communal facilities and some may just have communal grass to look after.

The estate charge pays for the upkeep of these through general maintenance, gardening, ensuring they are free of litter and safe to use.

The estate charge is included on your TP1 form when buying your property and should be highlighted to homeowners by their solicitor. If this wasn’t the case, please contact us and we can explain the estate charge in more detail.

Why isn’t this included in council tax?

The local council need to “adopt” the communal facilities of the estate in order for this to happen. This really varies from council to council. In some areas, new build housing estates are fully adopted by the council, but they may also remain as managed estates. Your developer will be able to give you more information about this.

So as your managing agent, what do we do?

A benefit of a managed estate is that we will work with residents and form a steering group to get them involved in making decisions about their estate.

Above all else, we are here to ensure that you live in a well-maintained and safe environment. We look after your money and budget and spend it carefully to ensure that you get value for money but also help to avoid surprise costs down the line.

  • We are responsible for ensuring the grounds are maintained and compliant with health and safety regulations
  • We are responsible for working with you to set an estate charge budget and collect individual contributions
  • We liaise with residents on a huge range of subjects, but usually around managing repairs and maintenance
  • We liaise with contractors to arrange maintenance and repairs

How much do I have to pay?

Your estate charge budget will give you a breakdown of all the expected costs over the next financial year, and we are also happy to talk you through this at any time.

For freehold new build housing estates, further details can be found in your TP1.  

For leaseholders living in flats, further details can be found in your lease.

Who decides the estate charge budget?

Each year, your managing agent will prepare a budget to cover what we think will be spent over the next financial year. We do this by reviewing the previous year, and by planning what repairs and maintenance will be needed. The budget will be signed off by the Directors of the Management Company before being shared with homeowners.

What happens if there is an unexpected cost?

Within your budget, there should be a reserve fund and we will strongly recommend keeping this topped up in case of any major projects or unexpected costs. There’s a strict process when we use the reserve fund and you’ll get notice before we do anything. 

Where is the money kept?

Each development has a separate bank account for the estate charge fund and reserve fund, not shared with any other development, and completely separate from the managing agents’ own funds.

And what happens at the end of the estate charge year?

It can take a number of months before we know what has been spent and the financial year is marked as “closed”.

This is because many suppliers invoice after work has been completed, or at set times throughout the year. So it can take 2-3 months to get the final invoices for the financial year and ensure these are correct and paid.

Once we have all the invoiced and costs, we will check the actual costs against the budget to get a final picture of what was spent. This is audited by an independent accountant, who prepares the year end accounts. We aim to send the year end accounts to residents six months after the end of the year. So if your estate charge budget year started in January 2018, we would be aiming to send you the final accounts by June 2019.

What if I need to pay more? Or I’ve overpaid?

This will be set out in your TP1 or lease, so please check this and let us know if you need help with this. Generally, the options are:

  • A surplus (which means there is money left over) could be credited back to homeowners
  • A surplus might also go into the reserve funds
  • A surplus could be rolled over to the next year’s budget
  • A deficit (which means there isn’t enough money to cover the year) is usually billed to homeowners