What is an FME1 management pack, and why am I paying for it twice?

The management pack has arrived — what should I be reading in it?

It is the file of answers about the shared services: who maintains what, what it costs now, what it is expected to cost, and who is responsible for organising it. On a freehold estate the form is called FME1; on a leasehold flat the equivalent is LPE1. Read it rather than filing it — it is the only document in the transaction that describes the running cost of living there.

From the e-ROT archive

This scenario is drawn from Report on Title material dealing with this specific circumstance.

Lexsure master Report on Title paragraph: Freehold Management Enquiries (FME1)/Management Pack · See the wording

What is in it, and what to read first

The pack is built around a standard set of questions, so the same ground is covered whoever completed it: what the service charge is, how it is calculated, what the current budget is, whether there are arrears or disputes, what works are planned, and who is responsible for the estate.

Three things repay attention. The budget, because it is the number you will live with. Anything in the answers about planned or anticipated works, because that is the number you have not been given. And the identity of the management company, because on a freehold estate your remedies are largely practical ones against it.

The money due before completion

Service charges are usually paid for a period rather than a month, so if the seller has paid to the end of the year, you owe them the part of that period after completion. The apportionment is calculated once a completion date is fixed and is payable to your solicitor before completion.

It is a routine figure and it is easy to be surprised by it because it only appears at the end. Ask for the completion statement as soon as a date is agreed.

The fee waiting for you when you sell

The pack costs money and the seller pays for it. That means you will pay for it when you come to sell or remortgage, because your buyer's solicitor will want the same answers and the management company charges for providing them.

There is no way round it, and it is not large relative to a sale. It is worth knowing about because it is one of several management company fees — notice of transfer, notice of charge, certificate of compliance, the pack itself — that arrive in ones and twos and are easy to miss when budgeting.

Freehold Management Enquiries (FME1)/Management Pack

Master precedent Lexsure e-ROTScope Apportionment and future feesWord count 107Status Current master paragraph

You may be required to provide an apportionment of any service charge payable for the rest of the financial year and you will be liable to pay the apportionments to ourselves before completion. This will be the apportioned amount from the day of completion up to the date which the service charge needs to be paid to Please be aware that when you come to sell/transfer or remortgage the property, you are likely going to be responsible for supplying the Buyer with replies to the FME1 form from the Management Company. They will charge a fee for this and you will be responsible for such a fee.

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