Estate Management Fees on Private Developments
Around 80% of new builds sold by the top 11 developers in 2021-22 were subject to estate management fees according to the Competition and Markets Authority (CMA). These cover the maintenance costs of private estates which are not 'adopted' by the local council, but homeowners still have to pay council tax. Leaseholds may be subject to both of these as well as service charges.
What are estate management fees on new build developments?
These fees cover the running and maintenance costs of roads, communal gardens or greens, private roads, car parks, play areas, and even streetlights. This is a relatively new phenomenon affecting a large number of homes built over the past 20 years or so.
Why do estate management fees exist?
Section 106 agreements were designed to ease the burden on overstretched local councils when granting planning permission for more housing. Developers agree to undertake extra works to support local infrastructure, as well as training initiatives, environmental improvements, and corporate objectives, or they pay the local authority to cover the cost of the work.
Developers reduce their 106 spend by agreeing to manage the estate themselves, and then pass this cost onto the homeowners who are forced to pay for 'public' amenities which are privately owned by the housing developers.
The problem with estate management fees
The mechanism has been highly criticised in recent years, dubbed 'Fleecehold' for the issues that homeowners face with payments, services, and resale.
Duplicate costs
When public access and amenities are publicly owned by the local authority, their maintenance is covered by the council. You're effectively paying for the private management of your estate, so the developer can get away with paying less into the council's coffers, and you still have to pay your council tax.
These fees should be based on cost; they average £350 per year (CMA), but vary widely and can escalate.
Limited consumer rights
When leaseholders are unhappy with the management of their building, they can exercise the Right to Manage, becoming responsible for managing the building and maintenance directly, or choosing and paying an agent to manage the property on their behalf. If you are unhappy with the level of service you are getting for your fees, whether it is poor, overpriced, or unreliable, there is very little you can do to fight your developer for better value, unless they clearly breach the contract.
No path for dispute/resolution
A comparable property maintenance fee, the leasehold service charge, has a clear course of action in the event of a dispute, through the First Tier Property Tribunal. Estate management fees have no equivalent dispute-resolution mechanism other than taking the developer to the county court; this is prohibitively expensive and complex.
If you do have the resources to take them to court, the fee contracts are written by and in favour of the developer, often being deliberately vague.
Difficulty selling
Because of the above issues, you may have difficulty selling the property later. Buyers and their conveyancing solicitors will enquire about the fee value and whether there has been any cause for dispute, even if none have been officially raised. High estate management fees, or poor management of the estate, are going to be red flags for buyers who may opt for another property without the added complication.
Do leaseholders pay estate management fees?
Leaseholders pay ground rent on the land their property sits on (although this has been largely replaced with peppercorn rent, effectively zero), service charges for the maintenance of their building (which have specific legal protections to keep them fair and reasonable), and may also be subject to estate management fees, if that building is on a privately owned estate managed by the developer.
What rights do freeholders have?
While freeholders generally have much more rights than leaseholders, if they own a property on a developer-owned private estate, they have very limited rights or control over the cost and quality of services provided in exchange for estate management fees.
What happens if there is a dispute over estate management fees?
If the developer or Residents Management Company (RMC) employs a property management company to oversee the estate, you may be able to lodge a complaint with a redress scheme: either The Property Ombudsman or The Property Redress Scheme. Otherwise, there is very little you can do until the legal changes expected over the next few years.
What happens if I don't pay my fee?
Under Section 121 of the Law of Property Act 1925, if a rentcharge is unpaid for 40 days, the management company can grant a lease on your home to a third party or repossess to recover the debt. You could be taken to court and forced to pay the debt, plus interest and additional debt-collection charges.
Your credit score will be negatively affected by non-payment of contractual fees, and if a County Court Judgement (CCJ) is made against you, you may struggle to get a favourable mortgage or other credit agreement for six years.
'Fleecehold' updates for 2026
The Leasehold and Freehold Reform Act 2024
The act was passed in 2024, but will come into effect with further legislation to be written through 2026 and onwards. It will strengthen the rights of freehold homeowners on private and mixed-tenure estates in England and Wales:
- Give freeholders the right to take disputes to a tribunal, and grant the tribunal the power to appoint a substitute manager.
- Improve the transparency of estate charges and administration charges.
- Require consultation on major works where estimated costs exceed a specified amount.
- Require developers without managing agents, and freehold estate managers, to belong to a redress scheme.
CMA report 2024
The report recommended action to provide greater protection for homeowners on private estates and to prevent the proliferation of new private management arrangements in ongoing developments. They also encouraged national governments to support local authority adoption of shared amenities on private estates.
The Government responded that they will monitor the effectiveness of the yet-to-be-fully-enforced Leasehold and Freehold Reform Act, and the anticipated Leasehold and Commonhold Reform Bill, and focus on preventing the proliferation of new arrangements, before deciding on any action on existing private estate management arrangements.
Leasehold and Commonhold Reform Bill 2026
The draft bill was published in January 2026, and promises enhanced protections for homeowners on freehold estates, as well as reducing further private management arrangements, increasing amenities adoption by local councils.
They conducted 12-week consultations on both, which concluded in March 2026.
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Caragh has written extensively for SAM with expertise on sale and purchase conveyancing, the Help to Buy redemption process, equity transfers and deeds, leasehold reform, RICS home surveys, shared ownership, and independent legal advice for specialist mortgage products and ownership structures.
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
