A management pack will generally always be required when you either sell or buy a leasehold property. It will be requested by the vendor’s conveyancer and supplied by the managing agent of the building.
What is a Standard Pack?
Each time an apartment is sold within a block, a maisonette and on occasions, a house, the managing agent (sometimes appointed by residents but usually the freeholder), will produce a standard pack and send that to the owner’s solicitor who in turn will provide this to the purchaser’s conveyancer. There is often crucial, potentially decision changing information.
This will contain documents referring to the managing aspects of the leasehold property to include; buildings insurance policy, freeholder contact details, any breaches by the leaseholder, applications to buy the freehold, fire risk assessments or an asbestos survey if necessary. Also, if applicable, three years accounting history.
In an apartment building, you may have a lift, communal halls to maintain, possibly parking or garden areas to attend to, fire safety and entry systems to look after so there will be a cost associated with this upkeep and this will likely be termed as service charges.
You are likely to encounter to incur another cost (unless you have a share of freehold tenure) named ‘ground rent’. This is what it’s stated to be, you do not own the land the property is built on so therefore are renting that ground from the freeholder.
Avoiding Additional Charges
Your conveyancer and yourself will want to review this information closely and ensure there are no unreasonable charges included and any increase is fair and can be explained. Also, that if there any charges due to be paid, an undertaking can be obtained stating they will be cleared at or prior to completion.
Another vital point to look for and be aware of is – are any major refurbishment works due on the building? This could include costly roof repairs or an upgrade to a lift. Often a contentious point is who should pay for this, so if work is anticipated it could prove wise to be cautious, is there a contingency or reserve fund in place perhaps?
You will possibly encounter a deed of covenant too. This is a promise to the landlord/freeholder that you will observe the contents of the lease terms and agree to pay the charges we note above.
Property Management Pack Cost
Please note, there are costs associated with acquiring this pack and there could be an additional notice or licence to assign fee, this alerts the managing agent and freeholder to a change of ownership and obligations relating to the particular apartment or property with their control.
This information, costs and charges will vary from block to block, type of property and the management set up. As a buyer, you hope the estate agent will be able to provide accurate information to you before you even view the property as a short lease or hefty charges can deter buyer. As a vendor you may remember the crucial point from when you purchased, let your agent know and once you agree a sale, request the document from your managing agent via your instructed conveyancer.