I am in the process of buying a house (freehold) which is in a new development consisting of 12 houses set in communal grounds. When the last house is sold (the one I'm interested in) the seller intends to acquire a new shell company, to be utilised as the Management Company, to carry out the management of the estate. All buyers will be required to be a member of the management company and have the opportunity to volunteer for post of director or company secretary. Everyone will be required to pay 100 pounds/year service charges. Sorry if that was all a bit long winded - I'm sure it's all pretty standard stuff, but just how do these things work???? What if nobody is interested (many of these houses have already been sold as BTL - who knows where the landlord is?) Can the elected director and secretary charge for there time doing company stuff? It all just seems very vague and open to abuse.
Looking through the solicitors report it seems that I will also be liable for contributing to the "reserve fund". Quote:"Please note that here the Management Company operates what is known as a "sinking fund" and you will be expected to make a contribution to this fund each year, which is collected on a regular basis from each property for use in connection with major items of expenditure e.g. roof." There's no indication whatsoever, of how much this might be???
I have to say that I've probably been quite naive with the whole situation so far: I thought that as the property was a freehold I would have more control over my own property. I cannot even have a pet in the house unless I have written consent from the management company.
Am I getting paranoid and maybe a little tense with all the legal jargon (as well as parting with loads of dosh), or are all these clauses and restrictions normal???