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My nightmare almost flat purchase
bob79
Posts: 166 Forumite
Warning: this is going to be a rant.
Back in November, I viewed a nice and decently priced 2-bed flat. It is the first floor of a converted two story Victorian terraced. There was a little snag: although the two flats are separate for council tax and utility purposes, they are owned by the same person. This means that there are no leases for the two flats and there is no management company in place.
The first floor flat was up for sale now and according to the estate agent the ground floor flat would be put up for sale when the current tenant (an elderly woman on an old style tenancy) would move into a care home (or when she died). Obviously the fact that there were no leases yet was a point of concern for me, since it then wasn't obvious what it is that I would be buying. The estate agent arranged a meeting between me and the owner to discuss this issue. He said that his intention was to -at the time of sale of the first floor flat- set up leases and a management company which would own the freehold. That's exactly what I had in mind. He also said that he had already reached the day of exchange on this property only for the buyer to pull out at that moment, so the leases and the management company were already basically set up (but if I wanted something changed this would still be possible). With hindsight: at that moment I should have asked for these documents.
Instead (after another viewing), I made an offer with the explicit condition that a management company would be set up by the time of exchange at the cost of the seller (the offer was accepted), had the survey done (no major problems), got the mortgage that I wanted (I'm a good risk, so no problem there) and appointed a solicitor. Just before Christmas my solicitor posted me the draft lease (drafted by the sellers solicitor). As you may or may not know: the lease mentions the freeholder. And the freeholder mentioned on the lease was the seller! The next day I received another envelop from my solicitor, this time with answers to the usual inquiries such as ground rent. The sellers solicitor referred to 'the lessee of the first floor flat' and 'the owner of the ground floor flat' and did not mention a management company, so it seemed clear that the seller now intended to retain the freehold. I was not amused.
I asked my solicitor to explicitly ask for clarification of the freehold situation. The letter in response from the sellers solicitor said that the seller now wanted to retain the freehold until the ground floor flat was sold. At that point in time, the buyer of the ground floor flat and I could buy the freehold and set up a management company.
So until the ground flat was sold, I would not own a share of the freehold. I explicitly wanted a share of the freehold and my offer reflected this. If I didn't have a share of the freehold, then I would have no say in for example building work. It's worthy to note at this point that the seller is a builder. As freeholder he could have his building company for example 'fix' the roof at any price that he sees fit and have me pay for it. So obviously I wasn't going to agree with this as I would be putting a noose around my neck. It was now also clear to me that the seller is probably the type of person who says one thing and does another (say: 'yes, I will put the freehold in a management company', but think 'once he has forked a thousand+ pounds in fees on this, he will probably just agree with me retaining the freehold' and once I kicked up a fuss change that to 'retaining the freehold until some undetermined time in the future' and hoping that I would agree to that instead).
So I instructed my solicitor to end the proceedings. Next day I got a phone call from the estate agent, a couple of hours after that from the seller and the next day from my solicitor who was phoned by the sellers solicitor. This luckily all went to my voicemail (I might have said some nasty things otherwise).
Even though the seller now, in order to save the deal, seemed to want to honor the original agreement (but he wasn't even clear about that in his message, he just sort of implied it), I don't want to be in a management company with someone like this. So I'm sticking to my decision to call it off.
Back in November, I viewed a nice and decently priced 2-bed flat. It is the first floor of a converted two story Victorian terraced. There was a little snag: although the two flats are separate for council tax and utility purposes, they are owned by the same person. This means that there are no leases for the two flats and there is no management company in place.
The first floor flat was up for sale now and according to the estate agent the ground floor flat would be put up for sale when the current tenant (an elderly woman on an old style tenancy) would move into a care home (or when she died). Obviously the fact that there were no leases yet was a point of concern for me, since it then wasn't obvious what it is that I would be buying. The estate agent arranged a meeting between me and the owner to discuss this issue. He said that his intention was to -at the time of sale of the first floor flat- set up leases and a management company which would own the freehold. That's exactly what I had in mind. He also said that he had already reached the day of exchange on this property only for the buyer to pull out at that moment, so the leases and the management company were already basically set up (but if I wanted something changed this would still be possible). With hindsight: at that moment I should have asked for these documents.
Instead (after another viewing), I made an offer with the explicit condition that a management company would be set up by the time of exchange at the cost of the seller (the offer was accepted), had the survey done (no major problems), got the mortgage that I wanted (I'm a good risk, so no problem there) and appointed a solicitor. Just before Christmas my solicitor posted me the draft lease (drafted by the sellers solicitor). As you may or may not know: the lease mentions the freeholder. And the freeholder mentioned on the lease was the seller! The next day I received another envelop from my solicitor, this time with answers to the usual inquiries such as ground rent. The sellers solicitor referred to 'the lessee of the first floor flat' and 'the owner of the ground floor flat' and did not mention a management company, so it seemed clear that the seller now intended to retain the freehold. I was not amused.
I asked my solicitor to explicitly ask for clarification of the freehold situation. The letter in response from the sellers solicitor said that the seller now wanted to retain the freehold until the ground floor flat was sold. At that point in time, the buyer of the ground floor flat and I could buy the freehold and set up a management company.
So until the ground flat was sold, I would not own a share of the freehold. I explicitly wanted a share of the freehold and my offer reflected this. If I didn't have a share of the freehold, then I would have no say in for example building work. It's worthy to note at this point that the seller is a builder. As freeholder he could have his building company for example 'fix' the roof at any price that he sees fit and have me pay for it. So obviously I wasn't going to agree with this as I would be putting a noose around my neck. It was now also clear to me that the seller is probably the type of person who says one thing and does another (say: 'yes, I will put the freehold in a management company', but think 'once he has forked a thousand+ pounds in fees on this, he will probably just agree with me retaining the freehold' and once I kicked up a fuss change that to 'retaining the freehold until some undetermined time in the future' and hoping that I would agree to that instead).
So I instructed my solicitor to end the proceedings. Next day I got a phone call from the estate agent, a couple of hours after that from the seller and the next day from my solicitor who was phoned by the sellers solicitor. This luckily all went to my voicemail (I might have said some nasty things otherwise).
Even though the seller now, in order to save the deal, seemed to want to honor the original agreement (but he wasn't even clear about that in his message, he just sort of implied it), I don't want to be in a management company with someone like this. So I'm sticking to my decision to call it off.
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Comments
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Why have you posted?I'm not cynical I'm realistic
(If a link I give opens pop ups I won't know I don't use windows)0 -
If you don't get a good feeling about it, then don't proceed. Unless the guarantees are in writing then you could find yourself regretting the move at a later date.
So, you've done the right thing0 -
Some assurance that I did the right thing by pulling out would be nice.:D
Yes, I am sure that you did. As I read through your post, my hair began to stand on end. If you hadn't already pulled out, I would have said: run away - fast.YouGov: £50 and £50 and £5 Amazon voucher received;
PPI successfully reclaimed: £7,575.32 (Lloyds TSB plc); £3,803.52 (Egg card); £3,109.88 (Egg loans)0 -
I don't really see a big problem here. If you read your post up until exchange you don't actually mention that you are anticipating owning a share of the freehold merely waiting for the leases to be set up.
If I was the builder I would do the same thing if I was keeping the downstairs- keep the freehold until I sold the other flat. As for management charges, it depends on the management contract but they can't just charge what they like- you could ultimately appeal against this to a leasehold valuation trubunal or even take over mangement in certain circumstances.
Obviously, if you are very keen to own a share of the freehold at the outset then you will have to back out but up to this point the sellers actions have been logical unless he specifically misled you.0 -
I very much doubt you will end up regretting the decision. I have been in a similar position, and pulling out was the smartest financial decision I have ever taken.Politics is not the art of the possible. It consists of choosing between the disastrous and the unpalatable. J. K. Galbraith0
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Entertainer wrote: »I don't really see a big problem here. If you read your post up until exchange you don't actually mention that you are anticipating owning a share of the freehold merely waiting for the leases to be set up.
The bit in my original post that referred to me specifically wanting a share of the freehold was the following bit of the second paragraph:
He said that his intention was to -at the time of sale of the first floor flat- set up leases and a management company which would own the freehold. That's exactly what I had in mind.
This might however have been putting it in the wrong way: I said at this meeting that I wanted a share of the freehold and he said that that was what he already intended to do.
Maybe I've been a bit harsh on the seller, true. Maybe it was just miss communication, but I feel that I can't really take the risk that it wasn't.0
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