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Beware of privately-owned roads and features within developments

Could your clients, unwittingly, be responsible for the repair and maintenance of a wall, road or boundary within their development? Yes they could, says Moshe Moses, Partner, Residential Real Estate at Seddons.

Moshe Moses

Housing development imageResidents in a block of flats in Edinburgh are, unfortunately, experiencing just that and have, reportedly, been hit with a £600,000 bill to replace a crumbling wall within the boundaries of the development, which they claim they were never told was their responsibility when they moved into their homes.

Moshe Moses, Seddons, image

Moshe Moses, Seddons.

It is not uncommon for solicitors acting on the purchase of a flat or a house in a new development to see that developers keep estate roads and boundaries privately owned and therefore not maintained by the Local Authority at public expense. The cost of such upkeep and maintenance usually manifests itself in an estate / service charge payable by the homeowner to a management company who would be responsible for making sure that any private land on the development is well maintained and in good repair.

If the development is complete, buyers should inspect the development, not just the property.

To avoid what the Edinburgh residents are experiencing, it is therefore critical to ensure that landlords and homeowners establish early on what their exposure is to contributing towards the cost of maintaining and repairing other areas of the development, which is unlikely to be limited to just the house or flat which is being bought.

As such, the key for any property solicitor instructed to act on a purchase in such a development would be to establish what land on the development is and will remain private and to carefully scrutinise the extent of the purchaser’s liability for contributing towards it. The only way that this can be ascertained is with careful consideration of the Title documents, service / estate charge information and either Lease or Transfer Documentation supplied by the developer’s solicitors. Accordingly, it would be very difficult for an unsuspecting buyer to know exactly what they are and are not responsible for once they complete their purchase. There is no legal requirement for estate agents to advise potential buyers in these matters, including risks associated with shared ownership and leaseholds.

Accordingly many agents caveat their sales particulars with the advice that everything stated should be verified by the purchaser’s solicitor. This is recognition of the fact that estate agents are not solicitors and therefore do not have the requisite legal training to offer advice on ownership issues. Ultimately this duty rests with the solicitor to absorb the information and advise the purchaser.

There are however some tips which purchasers can adopt to help clarify the position quickly and without incurring significant cost:

1 ASK THE QUESTION

Having read the above, it seems obvious but a conversation with the developer’s selling agent or an existing owner could provide an indication or at least enough information for them to discuss with a solicitor – ‘what parts of the development are remaining privately owned and what will I be expected to contribute towards over and above the upkeep and maintenance of my property?’

2 INSPECT THE DEVELOPMENT AND NOT JUST THE PROPERTY

Whilst it may not be possible if the development is under construction, if the development is complete, it could be useful to familiarise themselves with it so that it will be easier to cross-reference their understanding of the boundaries and the land within and the title plans that will be provided to their solicitor.

3 PROCURE SERVICE / ESTATE CHARGE INFORMATION

The developer may have produced an estimated service/estate charge budget. This would provide a breakdown of how funds collected are going to be spent and will detail the estimated costs of the estate and what they relate to – if, for example, there is an entry relating to the estate roads then potential buyers should check this with the solicitor as it would suggest that these will be privately maintained.

Ultimately, the legal documentation will govern the homeowner’s exposure and obligations towards their contribution.

Current owners of property concerned about potential previously unacknowledged maintenance responsibilities should contact their solicitor who advised on the purchase for clarification.

The recent experience of the residents in the Blandfield development in Edinburgh is sure to worry many aspiring purchasers and existing homeowners.

Whilst buyers may expect features such as the roads and boundaries within a development to be maintained by the council, this is often not the case.

Making sure that the purchaser and their solicitor are clear as to the boundaries of the development and what parts of the estate will remain privately owned is essential to ensuring that your clients don’t experience this potential time bomb!

November 23, 2017

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