HELP HELP - Freeholder issues when buying a flat

Fire_Fox

No service charge is set in stone - legally all it has to be is "reasonable" - with new builds, for example it's common for service charges to double in the first few years! If you don't understand how much power a freeholder has you should read the LEASE website: http://www.lease-advice.org/publications/

Normally if the freehold is being sold the existing leaseholders can exercise their right to collective enfranchisement, however as you are not yet a leaseholder you won't get a say and I suspect as the flat is a repo the lender will not want any complications.

LoopyLuna_2

Even the EA have said that the house has been a complete nightmare, which is surprising

I didnt realise this point

"All costs must be met by the leaseholders; the landlord will generally make no financial contribution. Most modern leases allow for the landlord to collect service charges in advance, repaying any surplus or collecting any shortfall at the end of the year.

basically im the only one in the house.. so i will pay for everything !!! and he will pay for 0 !!!! I feel quite giddy, I know it says generally but still!!. I never quite understood the power of the FH, the house is over 100 years old so i hope the cost wont bankrupt me! ekkk

if I wanted to be a tenant, i would stay in my rent flat. It seems safer and a lot less complex.

The ground rent is £280, thats quite a lot isn't it ?(my lawyer seemed to think so)..

Fire_Fox

LoopyLuna wrote: »

Even the EA have said that the house has been a complete nightmare, which is surprising

I didnt realise this point

"All costs must be met by the leaseholders; the landlord will generally make no financial contribution. Most modern leases allow for the landlord to collect service charges in advance, repaying any surplus or collecting any shortfall at the end of the year.

basically im the only one in the house.. so i will pay for everything !!! and he will pay for 0 !!!! I feel quite giddy, I know it says generally but still!!. I never quite understood the power of the FH, the house is over 100 years old so i hope the cost wont bankrupt me! ekkk

You will not pay for everything, each leaseholder will pay the share stipulated in the long lease (not always equal shares if some flats are substantially larger). When he has his freeholder hat on your new superior landlord will not pay anything, but when he has his leaseholder hat on he will pay a share for each flat he owns the lease on.

This is why you should always have a full structural survey carried out on the entirety of a period property, if the roof needs replacing at a quarter cost to you then you are forewarned. The freeholder usually has to consult on major works which gives you time to save up, but if the works are urgent then he can apply to an LVT for dispensation to go ahead.

Homersimpson

I think in plain terms the post above states that if the developer wants to put on a new roof then you will have to pay for some of the cost.


The general concensus is run run run!

Doozergirl

Ulfar wrote: »

If you have a property developer buying the freehold I would be running away fast.

I know this isn't your original concern but this developer isn't buying the freehold to loose money.

Without a freeholder or a managing company, the flats are greatly devalued. If the developer has boughtt he flats at a knock-down price and then fixes the situation, the value of the flats is restored and a profit is made. I still think that if evidence of the building being run in accordance with the lease is absent then it will make a lender very twitchy indeed - have you checked with your solicitor for a lender's stance on this as this whole thing may simply be out of your hands unless you have cash?

Whilst there is the possibility of the developer wanting to profiteer from the management of the flats (I think most blocks are run by people that profit from them - the management agents I have encountered charge ridiculous amounts for work) I suspect that the keener interest might first be in restoring the management of the flats.

Doozergirl

Homersimpson wrote: »

I think in plain terms the post above states that if the developer wants to put on a new roof then you will have to pay for some of the cost.


The general concensus is run run run!

You'd pay your share. What is unusual about that? If you want to put a roof on your own house you'd pay for all of it!

LoopyLuna_2

I have check and everything seems ok from the banks and lending perspective..they aren't jumping for joy. ..but with banks you never know. Well the flat isn't massive, but we will see will keep you all posted, as I may put in a reviewed offer and if they say no well, I wont lose sleep over it. Even if they do accept .. again it is my decision whether to proceed. Think i will start looking again, just so I know the market ext =] thankyou everyone

Ulfar

I am not trying to be a scaremonger but I have lived in a flats before and been a director in a tenants association running a group of flats.

Even when I was a director and you are the group in charge, it is scary how much costs can escalate. This was for a purpose built block where the association had been set up as part of the original sale of the development.

As for converted period houses I have had bad experiences. The worst was a fight I had with a freeholder who had charged £2000.00 in a year for communal lighting costs. This consisted of 3 lights with timer switches that were already in place prior to that year and needed no maintenance.

He tried unsuccessfully to state that it was because of the change to low-energy bulbs.

In the end I did win as the freeholder was unable to provide invoices to cover the costs.

Now I am not saying that your developer is out to rip people off, but they are out to make a profit. Even if this profit is the increase in the value of the flats by doing much needed work. The work is unlikely to only be to the interior of the flats, but also include works to the communal parts which you will all contribute.

You will be able to gauge the likelihood of this as you have seen the building and its state of repair.

The developer has stated to you that he wants to make changes to the leaseholds, I am not sure they can.

Sorry but my advice stands, run away as fast as you can.

Fire_Fox

Ulfar wrote: »

As for converted period houses I have had bad experiences. The worst was a fight I had with a freeholder who had charged £2000.00 in a year for communal lighting costs. This consisted of 3 lights with timer switches that were already in place prior to that year and needed no maintenance.

He tried unsuccessfully to state that it was because of the change to low-energy bulbs. In the end I did win as the freeholder was unable to provide invoices to cover the costs.

That is pretty impressive! We were charged £1200 in one year for replacement lamps (labour billed separately) for a block of fifteen flats. I actually took note of the brand and model of the lamps and priced them up on eBay. We'd have had to have every light bulb in the building replaced twice every week for the entire year to spend that much. :rotfl:

Ulfar

Fire_Fox wrote: »

That is pretty impressive! We were charged £1200 in one year for replacement lamps (labour billed separately) for a block of fifteen flats. I actually took note of the brand and model of the lamps and priced them up on eBay. We'd have had to have every light bulb in the building replaced twice every week for the entire year to spend that much. :rotfl:

It is amazing what they try and get away with.

The best advice I can give to anyone is buy a house freehold, if you must buy a flat look very carefully at the leasehold paperwork and get advice from your solicitor. Having said this watch out for charges charge you are liable as even freehold properties have nasties lurking.

If you already own a flat and are having problems, you do have rights.

If I was ever to own leasehold again I would always be asking for invoices and accounts. The first thing at the end of the year is to check the expected costs with what was actually spent, ask for a refund of any extra, they will certainly ask for any shortfall to be made up.

Always challenge anything that seems excessive or out of line with you lease.