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Management & Maintenance of Common areas – Legal Advice
It has become increasingly common for local authorities to resist the adoption of roads and other public spaces on new residential or mixed use development sites. As a result, the developers have to create a structure that will provide for the future management and maintenance of these common areas which are used by the majority, but not always all, of the occupiers of the site. Commonly, as the development site is constructed and parts are sold, then the obligation is passed from the developer to the purchasers.
Developers and Purchasers Legal Obligations
For the developer, there is a balance to be struck between complying with the planning consent for the development and ensuring that the new properties can be sold as easily as possible. The planning permission will have a condition that the developer must create an obligation to deal with the future management and maintenance of common areas. However, the necessary estate rent charges or service charges to capture this obligation must be created in such a way that the wording in the transfer documents or leases will not contravene the requirements of mortgage lenders, as this would affect the future saleability of the properties. Purchasers will also want to know whether they will be required to become a director/member of any management company formed to deal with the operation of such management and maintenance obligations.
Management Company Legal Support
We are frequently instructed in the formation of management companies. Typically, this will include dealing with the regulatory requirements at Companies House as well as the creation of a shareholders’ agreement and suitable articles of association to protect the new directors or members. We also advise the management company on its obligations and deal with the transfer of roads and other public spaces from the developer to the new management company at the appropriate time.
Service Charge Disputes
Service charges are paid by property owners to fund the development site’s management and maintenance costs. If you are faced with a dispute over service charges, our dedicated property disputes team at BLB Solicitors are ready to help.