Potential changes to estate management that developers need to be aware of

The Government is pressing on with plans to deliver greater transparency and control for homeowners on freehold estates. It has recently consulted on two aspects of estate management, with a view to bringing in changes that will affect how developers structure their freehold estates, and how they manage them until they have transferred ownership to residents.

Estate management charges

The Leasehold and Freehold Reform Act 2024 brought in a range of measures designed to help those living on freehold estates in England and Wales. While on the statute books, those are not yet in force.

A central part of these reforms are measures to allow residents to scrutinise freehold estate service charges, challenge whether they are reasonable (and therefore recoverable) and receive information on how their estate is managed.

The Government has consulted on how to implement the new framework through secondary legislation. It sought views on the below proposals:

• Estate management charges will only be recoverable if they are reasonably incurred and if the services or works are of a reasonable standard
• Estate managers will have an obligation to consult with homeowners and provide estimates for proposed works
• Estate management costs incurred more than 18 months prior to the demand cannot be charged to homeowners (unless homeowners had previously been notified of the liability)
• Estate managers must provide annual estate management reports/schedules of administration charges

In essence, the proposals mirror the existing regime for leasehold service charges, which have been tightly regulated for years. It is notable that despite that regulation, the leasehold system has still come under intense criticism, with the Government intending to replace it with commonhold in the near future.

Reducing the prevalence of private estate management arrangements

The Government has also consulted on proposals to reduce the prevalence of private estate management arrangements.

In particular, it sought views on proposals to:

• Increase the adoption of estate amenities on new development, such as roads, drainage systems, and green spaces by public authorities
• Introduce common standards for adoptable amenities
• Consider mandatory adoption for certain public infrastructure
• Remove financial incentives that make non-adoption attractive to developers
• Improve transparency and data on estate management arrangements.

Both consultations closed on 12 March 2026.

What could these changes mean for developers?

Historically, it was commonplace for local authorities to adopt common parts. It is only in recent decades that private estate management schemes have become the norm. This was not necessarily a developer-led change. Private estate management arrangements are administratively burdensome for developers (until they are transferred to residents) and are rarely (if ever) profitable. Changes to encourage local authorities to adopt common parts are likely to be supported by developers.

In the short-term, increased regulation of estate service charges will require developers to update their estate management practices, but in the long-term, adoption of common parts by local authorities should provide developers with cleaner exit from sites, at a lower overall cost.

If you have any questions about the topics raised in this article, our Real Estate team would be happy to help.