Management Company & Charges
Once complete the Waterfront will be made up of c.1500 houses and apartments, business units and a number of public open spaces. Different areas of the Waterfront will be managed in different ways and an understanding of the structure supporting the maintenance of the Waterfront is needed when buying a property to ensure residents understand the commitments that are made when purchasing a property.
Freeholds and Leaseholds
What is a Freehold Property?
The freeholder of a property owns it outright, including the land it’s built on.
If you buy a freehold, you’re responsible for maintaining your property and land, so you’ll need to budget for these costs.
Most houses are freehold but some might be leasehold – usually through shared-ownership schemes.
On the Waterfront, a Service Charge is payable by freehold properties, this is an annual charge and is used for maintenance of Public Open Spaces.
What is a Leasehold Property?
With a leasehold, you own the property (subject to the terms of the leasehold) for the length of your lease agreement with the freeholder.
When the lease ends, ownership returns to the freeholder, unless you can extend the lease.
Most flats and maisonettes are owned leasehold, so while you own your property in the building, you don’t have a stake in the building it is in.
Some houses are sold as leaseholds. If this is the case, you own the property, but not the land it sits on.
On the Waterfront, two Service Charges are payable by leasehold properties. Firstly the charge for maintenance of Public Open Spaces, in the same way as freeholders and secondly for maintenance of the block of flats that the lease applies to.
Development Management Charges
This is the area which causes residents significant concern twice a year: once, when they receive a demand for payment of the following years Maintenance Charge – usually a few days before Christmas; and then again when the year-end accounts from the previous year are received – usually in late Spring / early Summer.
The issues vary with those who are leaseholders having specific issues relating to their individual block to those from leaseholders and freeholders alike as both are liable for the wider Development Management Fee.
What is the Management company?
Public open spaces on the Waterfront are owned and managed through a complicated structure.
Barry Waterfront Residents Management Company Ltd (Management Company), is an independent company, limited by guarantee, established to have ownership of the public open spaces, and play areas of the Barry Waterfront. The Management Company is currently controlled by the consortium of builders and will be until the final houses on the development have been sold.
At the time that the final houses are sold, the control of the Management Company will be transferred to the control of residents who will be able to petition to join the Management Company as a director.
When purchasing a house on the Waterfront, all purchasers should be signed up as members of the Management Company by their solicitors. If you have any questions about the Management Company, you should bring these up with your solicitor at the time of purchase.
When selling a house on the Waterfront you may need permission from the Management Company to sell your property and this will come with an associated fee. Any changes to ownership of the property, such as a sale or transfer of equity will lead to a charge from the Management Company. This charge is to validate that the solicitors handling the change of ownership have correctly transferred the requirements to comply with the Management Company charges for maintaining Public Open Spaces.
What is the Management Agent and charges?
Remus Management Ltd (Remus), is the Managing Agent and appointed by the Management Company to carry out activities on behalf of the Management Company. This includes billing fees to residents, managing the Public Open Spaces and leasehold property communal areas and administration of the Management Company as appointed Company Secretary.
Residents will pay charges to Remus to cover any service charges applicable to leasehold and freehold properties.
It has become clear over the time that Remus have levied various one-off charges on residents for various actions over-and-above the annual Maintenance Charge.
There has been a lengthy debate as to whether these charges are: [a] permissible; [b] proportionate; [c] widely known; and [d] properly applied. It is accepted that there are no references to these charges in individual leases, or TP1s, but they are normal industry practice.
It is recognised that these charges are not in the public domain and may come as something of a surprise to residents, and we are pressing for these to be more accessible.
We have encouraged Remus to advise residents of charges that may be incurred at the outset of any enquiry so that they are fully aware of costs before final decisions are made by the resident.
We have suggested that information on these charges is included in the Remus Handbook, or as part of their introductory letter to new residents.
Issues with the management Agent.
First time purchasers of properties should have automatically been enrolled as Members of the Management Company as part of the buying process, but, on investigation, it would appear that this has not happened. For second and subsequent purchasers, there is also a requirement that new owners become members of the Management Company as part of the buying process. It is unclear whether this condition has been satisfied.
What are we doing?
Having been alerted by a resident of the problem, we reviewed the documentation that is in the public domain and on the Companies House website where we discovered incorrect information had been filed by Remus acting as Company Secretary of the Management Company.
We have engaged with Remus to share our concerns about the apparent maladministration; seeking an explanation for the error; and Remus’ plan to correct the error.
We have emphasised that under no circumstances are costs to be recovered from residents.
What has been achieved?
The withdrawal of incorrect information at Companies House, and the subsequent filing of corrected data.
Correspondence from Remus to those with whom they already have a relationship inviting owners to become members of the company.
New Bold Solicitors input
As discussed at the 2022 AGM, BWCRA sought legal advice to share with members about this topic.
A summary document, prepared by NewBold Solicitors after a meeting with BWCRA on 11th March 2022 is available here
We would advise all residents that any further questions they may have on this issue should be raised with their legal advisers at the time of purchase. However, if that is not possible, NewBold Solicitors are able to provide further advice at a fee.