A client was recently advised by an estate agent that they would need to pay an ‘Estate Charge’ when purchasing a freehold property they wanted that is located on a privately owned estate. Here our conveyancing solicitors demystify what this is and if it has to be paid.
Q. We are thinking of buying a freehold house on a private estate but have been told by the estate agent that an "estate charge" is payable. He doesn't know how much it is and, though we have heard of service charges for leasehold flats, we have never heard of an estate charge. What is it-and what is it for?
A. Property owners on privately owned estates are usually required to contribute towards the upkeep of communal areas. This is generally known as an estate charge and is levied to help fund services, repairs and maintenance on the estate, and means that all the property owners share the cost.
The estate charge is not used to pay for the repair and maintenance of individual properties but is used to fund services that benefit the whole estate, such as street lighting, the landscaping of gardens and the upkeep of the private roads.
Sometimes all the property owners on a private estate pay the same charge, but the figure can vary too. For instance, estate charges can be calculated according to the number of rooms a property has, or its floor area. The charges can also include a management fee for the estate.
The title deeds for the property you aim to buy should confirm the amount of the estate charge payable, the date upon which payment is due, to whom the payment should be made and what services the charge covers.
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