By Aaron Bailey

There is a common myth amongst purchasers of property that management company fees only affect leasehold estates. However it has become increasingly more frequent that freehold property is also subject to management company fees, and both private estates where there are freehold and leasehold properties mixed or solely leasehold or freehold.

In these scenarios management companies are usually set up for the purpose of maintaining communal areas which may just simply be private roads; but can also extend to things such as electric lighting, landscaped gardens, communal parks, street lighting, refuse areas, sewer pipes etc.

Where a purchaser buys a freehold estate that is subject to management company fees, these are usually set out in the transfer deed that they will have signed in order to purchase the property. A good transfer deed will have set out the responsibilities of the management company as well as the responsibilities of the purchaser and any specific contributions that they are responsible for within the deed. It will also include dates payment should be made and whether any accounts will be provided to the purchaser either annually or otherwise. It is important that any purchaser understands these obligations and if the responsibilities or payments are not clear that their legal representative queries these matters prior to an exchange of contracts.

On freehold Estates it will be important to check that there are no restrictions that may affect the purchaser during their ownership of the property; these can be restrictions on things such as external decorations, parking, external alterations, and aerial or satellite dishes.

If you have already purchased your property but are unsure about the information that was contained in your transfer deed a copy can be obtained from the land Registry website for a small fee.

Where properties are freehold they may be subject to a rent charge sometimes called a chief rent, these can only be applicable on Freehold Estate and will not affect Leasehold Estates.

A rent charge is usually an annual sum of money paid to a third party who has no other interest in the property. They are called the rent owner. These rent charges are usually historic and go back many centuries to an historic system when people would sell land for development and could charge people for living on it.

Estate rent charges are only legal if they are supported by covenants in the transfer which carry obligations to provide services and repair etc.

For any queries relating to this article or Conveyancing queries in general, please email Aaron: or contact us on 0115 955 2299

20th February, 2018