When embarking on a new build development project, developers will navigate many legal factors, particularly when it comes to the maintenance of common areas. Common areas such parks, communal gardens and shared amenities can really enhance the appeal of a development and the well-being of communities.

Before commencing construction on a development it is essential to consider fully what maintenance is required for the intended common areas and how this will be achieved. Here we explore some of the important legal matters to be considered.

Key considerations

Management agreements: Entering into a robust management agreement is important. They are designed to protect both the developer and management Company, detailing expectations and obligations of both parties. A well drafted agreement will assist in maintaining a good relationship between all parties and provide comfort to all that the common areas will be maintained.

Transfer: At the end of a development the common areas should be legally transferred to a management company. This will avoid the responsibility for the common areas continuing to sit with the Developer along with any costs associated with it.

Obligations: Developers may have obligations to designate and maintain public open spaces within their developments whether this be with the Local Authority or with an appointed management company. Consideration should be made as to what these obligations are, that those requirements are met and that any provision for management and maintenance of the areas is sufficient. Failing to fulfil these obligations could result in a breach of contract and/or planning obligations.

Rights: A developer must ensure that a management company has the legal right to enter onto the common areas in order to manage and maintain them. It must be further considered when this right is to be granted. This could be at the point of legal transfer to the management company or sooner if the management company will begin maintaining the areas on behalf of the developer before.

Restrictions: Thought should be given to how the management of common areas will be funded and how the use of the areas are regulated. A common solution is for a restriction to be entered on the plot titles upon sale of a property. This will usually include a new buyer entering into a Deed of Covenant to ensure that service charges continue to be paid and that plot owners comply with covenants. Before selling plots on the development the provisions, covenants and restrictions needed within the legal documentation should be discussed with your appointed solicitor.

Costs: Accurate provisions to collect any service charge from residents must also be considered. It is important that the provisions contained within the Transfer Deed for each plot allow the developer to collect such costs if necessary prior to a management company maintaining the areas but also to enable a management company to collect the costs upon handover and transfer of the managed areas to them.

Risks associated with poor maintenance provision

Reputation: A poorly maintained common area on a development can attract unwanted attention which can result in negative publicity and affect the reputation of a developer and/or a management company.

Public liability: Public liability should be at the top of the list of considerations. Until the common areas are transferred to a management company, the liability for any accident or damage occurring on these areas would fall with a developer. This highlights the importance of transferring the areas as soon as possible after the development is completed.

Ownership: Once a development has completed it is usual that a developer wishes to have a clean exit from the site. Any delay in arranging for the management of the common areas or transferring the areas to a management company would hinder this and leave a developer with ongoing responsibilities. Also a lack of ownership by a management company may restrict their ability to make the necessary decisions regarding maintenance, improvements, or development of the common areas.

Providing for adequate maintenance of common areas and proactively considering the above points will be pivotal in the effective management and maintenance of the common areas and in fostering a thriving community.

At Switalskis, our aim is to help developers and management companies access the legal support that is vital to the success of the site. Contact us today - call 0800 138 0458 or email help@switalskis.com