Estate Service Charges – What You Need to Know

If you are buying a newly built or modern property, especially on a housing estate, you might be asked to pay something called an estate service charge.

What Is an Estate Service Charge?

An estate service charge is a fee paid by homeowners to help cover the cost of maintaining shared spaces and services on an estate which are not adopted by the local council.

Instead, a management company is appointed to look after the shared spaces and services like private roads, landscaped areas, and play spaces and homeowners contribute towards those costs.

What Does and Estate Service Charge Cover?

Although the details vary from one estate to another, typical services covered include:

• Maintenance of private roads and pavements
• Upkeep of communal green spaces, gardens, and play areas
• Street lighting and sometimes other infrastructure
• Management company fees for running the estate

Even if you own a freehold house, you may still need to pay these charges as they are not limited to flats or leasehold properties.

Why Do Estate Service Charges Exist?

Local authorities do not always agree to take over responsibility for roads and open spaces in new developments. As a result, the developer or a private management company continues to manage these areas, funded by homeowner contributions. These charges help maintain the appearance and quality of the estate.

How Are Estate Charges Different from Leasehold Service Charges?

• Leasehold service charges cover shared parts of a building, like lifts, hallways, and roofs which are mainly for flats.
• Estate service charges apply to the wider estate like roads and landscaping and can apply to both leasehold and freehold homes.

So even if you buy a freehold house, be aware that an estate service charge could still apply.

What to Look Out for When Buying a Property

If you are buying a new-build or recently built home:

• Ask early on if an estate service charge applies and how much it is.
• Check whether charges are fixed or variable, and how often they are reviewed.
• Ask for details of what is included and whether any major costs are expected.
• Confirm who the management company is and how you can contact them if needed.

Knowing the costs and your responsibilities upfront can help you plan your future budget and avoid surprises later on.

Need Further Advice?

If you are buying or selling a property that involves an estate service charge, our residential property team can help you understand your obligations and check any legal documents.