You may wonder why you are being asked to pay a service charge when you have purchased a Freehold property. It is however now very common for a freehold property to have an arrangement with a management company in which service charge is payable. The service charge payable to the management company is usually for various services carried out by the management company such as, maintenance of landscaped and communal areas, play grounds, etc and this is mostly found to be the case on newer built estates.
The most common situation, is for the developer to appoint managing agents who take over the responsibilities however sometimes the property owners of the estate may become the directors of the management company and are responsible for ensuring the obligations of the management company are carried out.
When a property is being sold, as a seller, it is likely that you would need to pay the management company to obtain an FME1. This will include information for the potential purchaser, such as the amount of service charges paid, what is covered under the charge and whether there are any expected increases etc. It is your responsibility to cover the cost of obtaining this information. No two management companies are the same and the cost to obtain the information will differ between companies.
It is wise to ensure you understand the obligations you will be under once you purchase a certain property to make sure it is the right choice for you.
