Would you buy an Apartment/Flat in the current climate?

franklee

Fire_Fox wrote: »

Management companies usually don't have the right to refuse to provide services when some leaseholders don't pay, however that doesn't stop them trying it on.

Hi Fire Fox, If significant numbers of those getting repossessed or absent landlords don't pay the maintenance charge then surely the management company has to cut services while they chase the cash which they may not recover all of? What else can they do if they don't have the required income?

An example from Scotland:
http://www.eveningtimes.co.uk/news/display.var.2034648.0.0.php

Fire_Fox

franklee wrote: »

Hi Fire Fox, If significant numbers of those getting repossessed or absent landlords don't pay the maintenance charge then surely the management company has to cut services while they chase the cash which they may not recover all of? What else can they do if they don't have the required income?

An example from Scotland:
http://www.eveningtimes.co.uk/news/display.var.2034648.0.0.php

Only if the lease allows for that: most don't, certainly mine doesn't.

It's the landlord's (freeholder), or his agent's, responsibility to collect the service charge and to maintain the property according to the terms of the lease. There are channels for collection of service charge arrears, including Leasehold Valuation Tribunals and adding the debt to the mortgage. If the ground rent isn't paid the entire flat can be 'repossessed'.

If the managing agents wish to surrender their contract to maintain the property that's their prerogative, it's then the freeholder's responsibility to employ another company or take over managing the place himself. BTW Scotland has slightly different laws to England and Wales in respect of leasehold properties.

franklee

Fire_Fox wrote: »

Only if the lease allows for that: most don't, certainly mine doesn't.

It's the landlord's (freeholder), or his agent's, responsibility to collect the service charge and to maintain the property according to the terms of the lease. There are channels for collection of service charge arrears, including Leasehold Valuation Tribunals and adding the debt to the mortgage. If the ground rent isn't paid the entire flat can be 'repossessed'.

That's interesting. If the flat owner (a BTL LL going under) doesn't pay his mortgage or maintenance charge/ground rent then both the lender and the freeholder/managing agent will be chasing debts for which there isn't enough money in the pot to be paid back upon repossession as the value of the flat has gone down.

If the unpaid ground rent gives the freeholder the right to repossession and the unpaid mortgage gives the lender the same right I wonder who gets priority?

At the least the manging agent may have problems while waiting for the property to be sold before getting paid. I guess the new owner inherits the old maintenance debts.

Also the same questions arise when many of the flats have been sold off plan, exchanging contracts a year or two ago, but the buyers can't complete now as they can no longer get a mortgage. This leaves the flat empty while the builder may be taking action aginst the buyer. Some blocks in London have lots of buyers in that position. Again must cause problems with the maintenace funds.

Mexas

Thanks for the great advice. :T

Definitely given me food for thought. Never even thought about who i could potentially be moving next to neighbours wise (in relation to more than one flat on the market in the same complex). I'm a light sleeper so in my case it would be a nightmare if i moved next someone who was really noisy.

I'm going to continue to monitor the market, at least I'll have a plan b if the house doesn't materialise.

Fire_Fox

franklee wrote: »

That's interesting. If the flat owner (a BTL LL going under) doesn't pay his mortgage or maintenance charge/ground rent then both the lender and the freeholder/managing agent will be chasing debts for which there isn't enough money in the pot to be paid back upon repossession as the value of the flat has gone down.

If the unpaid ground rent gives the freeholder the right to repossession and the unpaid mortgage gives the lender the same right I wonder who gets priority?

At the least the manging agent may have problems while waiting for the property to be sold before getting paid. I guess the new owner inherits the old maintenance debts.

Also the same questions arise when many of the flats have been sold off plan, exchanging contracts a year or two ago, but the buyers can't complete now as they can no longer get a mortgage. This leaves the flat empty while the builder may be taking action aginst the buyer. Some blocks in London have lots of buyers in that position. Again must cause problems with the maintenace funds.

You cannot complete a sale on a property with service charge arrears: the solicitor won't allow it. Often the purchaser gets stung between exchange and completion. I bought my apartment (show flat, so empty for over a year) from the developer and had to find several hundred pounds for this. Ironically, five years on my flat would be very difficult to sell as I have £3.5K of arrears which I am in a long-standing dispute over!! :rolleyes:

Ground rent is usually in the region of £50 to £150 a year. Whilst in law this means the flat can be repossessed it's not as quick a process as repossession for mortgage arrears so it's unlikely both would occur simultaneously. If there was a dispute the freeholder would presumably lose since they could be offered a reasonable sum for arrears plus costs incurred in collection. For obvious reason I don't have any arrears on my ground rent or buildings insurance ...

mooner76

Todays penthouses

Tomorrows slums

no thanks

ILW

Mexas wrote: »

Thanks for the great advice. :T

Definitely given me food for thought. Never even thought about who i could potentially be moving next to neighbours wise (in relation to more than one flat on the market in the same complex). I'm a light sleeper so in my case it would be a nightmare if i moved next someone who was really noisy.

I'm going to continue to monitor the market, at least I'll have a plan b if the house doesn't materialise.

If you are a light sleeper do not even think about a flat.

Fire_Fox

Mexas wrote: »

Thanks for the great advice. :T

Definitely given me food for thought. Never even thought about who i could potentially be moving next to neighbours wise (in relation to more than one flat on the market in the same complex). I'm a light sleeper so in my case it would be a nightmare if i moved next someone who was really noisy.

I'm going to continue to monitor the market, at least I'll have a plan b if the house doesn't materialise.

Look at the layout of the flat and the quality of the soundproofing. If it's a stand-alone block, try to get a corner flat - these are much brighter and more desirable for selling later. My building is effectively part of a terrace, and mine is an 'end' flat. My living area abuts another living area, my bedroom next to offices! :T

Having had no neighbours for two years, the adjacent flat is now occupied. Given that I can hear the lady's heels clicking on the wooden floor I am guessing the place is not well soundproofed! Went round last night (10.45pm) to ask for her to turn the music down a little - no problem at all. IME this is usually the case.

northerner79

Always look at supply and demand. Look at the trend of prices. Developers are offeirng up to 50% off apartments in Leeds and Manchester. Depends on your motives for buying and long term aims.