A few issues found during buying process

sebtomato

Hi,

I am in the process of purchasing a flat.

• Offer has been accepted
• Mortgage has been approved
• Home buyer survey done

However, the process uncovered the following issues:

• Service charges are 20% higher than stated by the seller and on the very recent HIP. They were already quite high, and are increasing by at least 5% per year. On top of the additional expense to be paid by me, I think this could make the property harder to sell later on
• Underground secure storage area does not appear on the lease. It's probably part of the flat, but no documents mention it, so no real recourse if not available/already used by other flat. I am not sure what the value of such space.
• Boiler and pressure pump seem to have issues: hot water pressure is quite low, and seller disabled the boost pump for some reasons (maybe noise). Seller stated that everything was in working order, but surveyor has some doubts. Worst case is boiler and pump have to be replaced, probably worth £2K at most.

I am still interested in the flat, but I am not sure how to work on those issues. Should I just reduce the price?

Thanks,
Seb

olly300

If the service charges are very high then reduce your offer. Remember it's very rare for service charges to decrease over time. Plus you may also have to fork out some time in the future for additional works.

If the seller won't take a reduced offer due to the high service charges then pull out.

Regarding the other issues:
1. Flats often come with storage or other areas that aren't actually part of the lease which the flat owner can use without complaint from the freeholder or other leaseholders. For example loft space or outside space. You can ask the freeholder about getting permission to use them in the lease but it just tends to hold up the flat purchase and the freeholder tends to ignore the request anyway.

2. As far as the seller knowns the pump and boiler worked when they disabled it but it may not work now. As the boiler works and you haven't stated it's not safe you can't state that you want the full cost of a replacement boiler. So if you know a friendly Gas safe registered workman who can come out, have a look and quote you for the repairs then call them in. If they then say the pump doesn't work then you can renegotiate to get the pump price from the seller.

sebtomato

olly300 wrote: »

If the service charges are very high then reduce your offer. Remember it's very rare for service charges to decrease over time. Plus you may also have to fork out some time in the future for additional works.

If the seller won't take a reduced offer due to the high service charges then pull out.

Regarding the other issues:
1. Flats often come with storage or other areas that aren't actually part of the lease which the flat owner can use without complaint from the freeholder or other leaseholders. For example loft space or outside space. You can ask the freeholder about getting permission to use them in the lease but it just tends to hold up the flat purchase and the freeholder tends to ignore the request anyway.

2. As far as the seller knowns the pump and boiler worked when they disabled it but it may not work now. As the boiler works and you haven't stated it's not safe you can't state that you want the full cost of a replacement boiler. So if you know a friendly Gas safe registered workman who can come out, have a look and quote you for the repairs then call them in. If they then say the pump doesn't work then you can renegotiate to get the pump price from the seller.

Thanks.

2. For the storage space, it is supposed to be a locked cupboard allocated to the flat (numbered). The dedicated parking space is in the lease, but not the storage space. I know my current landlord struggled to get his numbered storage space back, as all the keys were the same, so I want to avoid such issues.

3. The boiler is electric. The surveyor states that water pressure should be higher with that type of boiler (and cold water pressure is fine), so he thinks the issue may not be just with the boost pump but possibly with the boiler.

poppysarah

Stop being interested in the flat. It sounds like it's only going to eat your money

Bananamana

sebtomato wrote: »

Hi,

I am in the process of purchasing a flat.

• Offer has been accepted
• Mortgage has been approved
• Home buyer survey done

However, the process uncovered the following issues:

• Service charges are 20% higher than stated by the seller and on the very recent HIP. They were already quite high, and are increasing by at least 5% per year. On top of the additional expense to be paid by me, I think this could make the property harder to sell later on

your conveyancer should have the last 3 years accounts and expenditure. Have a look at the outgoings to see where the rise is coming from. If its recent works could explain the increase (obviously the same works wont be needed again :P)

• Underground secure storage area does not appear on the lease. It's probably part of the flat, but no documents mention it, so no real recourse if not available/already used by other flat. I am not sure what the value of such space.

If you need it you could approach the seller to have the lease rectified (if it's intended to be either part of the title or if there is a right to use it). Depends how much of a rush your in as most freeholders are slow in this respect.

• Boiler and pressure pump seem to have issues: hot water pressure is quite low, and seller disabled the boost pump for some reasons (maybe noise). Seller stated that everything was in working order, but surveyor has some doubts. Worst case is boiler and pump have to be replaced, probably worth £2K at most.

Ask a plumber to have a look. Surveyor will have minimal knowledge.

I am still interested in the flat, but I am not sure how to work on those issues. Should I just reduce the price?

Thanks,
Seb

comments above. Depends just how interested you are I guess coupled with how patient you may be

sebtomato

poppysarah wrote: »

Stop being interested in the flat. It sounds like it's only going to eat your money

Well, I have already spent on a home buyer survey (rather than a cheaper basic valuation), other surveys and solicitor time, so I would prefer not to have spent that money for nothing.

brit1234

sebtomato wrote: »

Well, I have already spent on a home buyer survey (rather than a cheaper basic valuation), other surveys and solicitor time, so I would prefer not to have spent that money for nothing.

However if you walk away you may save a lot of money in the longer term. I would rather have that extra sevice charge over paying the mortgage on another property. Plus it will put off buyers in the future.

If you do walk away prices are now falling and are expected to fall for t least to the end of the year. The savings will more than cover the intial survey cost as well as the survey cost on future properties survey. That also does not include saving all that lost equity you will get from this property as prices continue to fall.:think:

olly300

sebtomato wrote: »

Well, I have already spent on a home buyer survey (rather than a cheaper basic valuation), other surveys and solicitor time, so I would prefer not to have spent that money for nothing.

You are thinking of it the wrong way.

The home buyers survey and solicitors fees are to ensure that you aren't buying a lemon.

However if it looks like you are going to be buying a lemon then you have spent at most £1000 rather than a hundred or many more times that.

So get the problems looked at the same time start looking at other flats, then renegotiate once you have a cost for the problems. If the seller won't renegotiate or you find a better flat then walk.

BTW do you know when the electrics were done? Very few surveyors know anything about electrics and if the boiler and heating is electric you need to know this.

sebtomato

olly300 wrote: »

You are thinking of it the wrong way.

The home buyers survey and solicitors fees are to ensure that you aren't buying a lemon.

However if it looks like you are going to be buying a lemon then you have spent at most £1000 rather than a hundred or many more times that.

So get the problems looked at the same time start looking at other flats, then renegotiate once you have a cost for the problems. If the seller won't renegotiate or you find a better flat then walk.

BTW do you know when the electrics were done? Very few surveyors know anything about electrics and if the boiler and heating is electric you need to know this.

Sure, I understand it's better to lose £1000 than more in the longer term. However, I have already managed to drop the flat price by a significant amount when I made my final offer (and paying less than all the valuations done from various sites), and it took me a while to find what I was looking for (visited probably 70 flats in 4 months). Seller is keen to proceed now, since they found another place, so I guess I will just try to drop the price further to reflect the issues found. They can either accept it or find another buyer. After all, they provided false information several times.

The flat was only built 7 years ago, so everything is recent.