Ex-local authority flat and major works bill - HELP!

suljka

I'm a FTB and already got answer to couple of pressing questions her, thanks to all who answered my previous thread :T
Hoping someone can help with this question too.

The flat we are wanting to buy is in the building that is an ex-local authority, now taken over by the social housing landlord. The building is still undergoing major renovation to all common areas and has had new windows installed. Condition of the sale of the property would be that the seller pays for the "major works bill" which is what the EA is saying and the seller has agreed to, but even though we've been trying to find out about the exact cost of that work we've been unable to get it. The seller is giving a figure which does seem bit overblown, but is not substantiating his claims with any written evidence.
We're pretty sure they must have something written to them regarding this cost, but how do we get it. Tried to approach their freeholder about it (social housing landlord mentioned above) but was told we'd need to enquire through solicitor, after been taken round bends couple of times and passed from one office to another. Is this really the case - where does freedom of information come in here?

The reason we want to see this bill is that the seller is making a big thing about it in negotiating the price, so we need to know the exact cost.

What is the exact procedure when major works bill is looming? When are the exact costs known? And if the building work isn't quite finished yet, does that mean that they could ask for more money once the work is finished? Where would that leave us if the sale went through in the meantime?
Can anyone help?

wessexw

I had exactly the same in a property I was trying to buy a few months ago. My solicitor found out the info during the conveyancing, he directly asked the HA about planned major works and they supplied him with the info. It turned out that the price they quoted for the major works was ridiculously overblown so I pulled out of the purchase because of it. Be very very careful with HAs and major works on their leasehold properties, there's some horror stories around

firstaspect

I would tell the seller that you are not interested in any negotiation over price until you've seen written confirmation of the works which are needed to be done and there associated cost.

suljka

wessexw wrote: »

I had exactly the same in a property I was trying to buy a few months ago. My solicitor found out the info during the conveyancing, he directly asked the HA about planned major works and they supplied him with the info. It turned out that the price they quoted for the major works was ridiculously overblown so I pulled out of the purchase because of it. Be very very careful with HAs and major works on their leasehold properties, there's some horror stories around

Thanks for your reply - that sort of situation is exactly what we are trying to avoid. We've been pestering EA for the info, but he's insisting that the seller doesn't have written document about it, which in my opinion is totally ridiculous. If you are supposed to be paying such a large amount, surely you keep all documentation about it. The EA is insisting that "it doesn't matter" because it will be sellers responsibility to pay it, but we insist on seeing it and will not budge on that. Seller is taking in account that bill in determining their asking price, therefore it is very much our business to know what the amount is, so that we can determine if the asking price is actually realistic!! Will keep on insisting to see the info about it now, rather than paying legals to obtain it!
As for major works horror stories, I can only imagine - that's why we're trying to find out as much as we can at this stage rather then getting nasty surprises later on.

suljka

Doctor_Gloom wrote: »

Ex-council properties are always subject to rip-off repairs bills. Leaseholders end up paying for those who aren't leaseholders.

We are aware of that, but unfortunately our budget means that the ex-council property is a must!!
Luckily, these days, there are regulating bodies you can complain to about overblown costs, still one can't help but wonder why would you have to do any complaining when the whole thing could be better regulated to avoid such instances in first place

ILW

This could easily end up costing you a whole lot more than a higher priced property.

Richard_Webster

Seller may well not have the information, but in due course the buyer's solicitors will send a questionnaire to the seller's solicitors which he will expect answered by the HA/Council. As they generally charge perhaps £50-£150 for supplying this information (outside private landlords/managing agents often charge up to £300 for the same thing!) the seller is normally expected to bear this kind of charge.

However nothing to stop buyer from telling seller to get his solicitor to get the information now if he hasn't already got it.

suljka

Richard_Webster wrote: »

Seller may well not have the information, but in due course the buyer's solicitors will send a questionnaire to the seller's solicitors which he will expect answered by the HA/Council. As they generally charge perhaps £50-£150 for supplying this information (outside private landlords/managing agents often charge up to £300 for the same thing!) the seller is normally expected to bear this kind of charge.

However nothing to stop buyer from telling seller to get his solicitor to get the information now if he hasn't already got it.

Well yes, that is all we are asking - to see a paper that supports the figure they've told us.
I'm finding it pretty unbelievable that the seller has no written confirmation about how much the major works cost would be, but is anyhow prepared to pay for it?! That just doesn't make any sense, does it? That is like getting some builders to do some work for you, without expecting them to give you any quotes and estimates for the work and whatever they decide to charge you in the end will be ok with you.

I don't doubt that the solicitors would be able to obtain the figures, but seeing that the seller is stating particular amount for this cost and is relying heavily on that amount in their asking price for the property, I don't think it is unreasonable to ask their should be substantiated by some written evidence, and for us to see that now.

suljka

ILW wrote: »

This could easily end up costing you a whole lot more than a higher priced property.

Well monthly cost would end up being in par with higher priced property, but ex-council is simply the only type of property that is in our price bracket in London.
Although saying that I think lots of ex-council properties still have such a bad stigma attached to them and people are often bias when assessing pros and cons A friend of mine is paying £2000 yearly service charge for his 1 bed leasehold flat in Victorian conversion, this is actually higher than the service charge in most ex-council properties... not to say that makes them fairer :eek:

mostlycheerful

“I'm finding it pretty unbelievable that the seller has no written confirmation about how much the major works cost would be, but is anyhow prepared to pay for it?! That just doesn't make any sense, does it? That is like getting some builders to do some work for you, without expecting them to give you any quotes and estimates for the work and whatever they decide to charge you in the end will be ok with you.”

Yes indeed, that may be exactly where they’re at. A lot of this stuff starts with an S20 Notice of Intent or whatever terminology they use and some blah about the bidding process for the main contractors and then either no indication of figures or rarely some sort of estimate. And, yes, they’ve got you over a barrel and they can do what they want and yes, it’s variable and there are quite often all sorts of twists and turns. Often they fraud the whole thing and, for instance, a common scam is to put the scaffolding up for 9 months but only ever do one week of shoddy rip off work. In several parts of London the works have failed in all sorts of ways, and been heavily challenged by dozens and hundreds of victims with lots of cases being taken before the courts and to arbitration and whatnot. And, for instance, in north London one of the big, like very big, contractors recently went bust with therefore a vast amount of fall out. There’s often a lot of negligence, gross incompetence, fraud and backhanders and corruption going on and it’s all just a stinking great big pile of pants, from top to bottom. And sometimes it rumbles on and on for years and years.

Some of it gets exposed in the media so perhaps do a bit of research and read up some of the more colourful soap operas about this endemic failure of national and local government. Twas ever thus, building is traditionally an inexact art with a dash of commonsense and science buried deep underneath it. Yeah, very tedious. What a crashing bore.

Yeah, so far you’re just scratching the surface, so lift up the carpet and have a gander at all the insects climbing all over each other and eating each other head first and such like, it’s a gross spectacle. But it’s par for the course, nothing unusual about this, it’s how it’s done. And it’s even worse in most other countries. There is at least a slight pretence at standards in this country, but check out a lot of other European countries and it’s a whole lot worse. And in third world countries? Gordon Bennett, you wouldn't believe it, you couldn't make it up!

Leaseholder49

As someone else has said, this property may turn out to be a false economy.

As well as the cost of the major works already being implemented (what sort of figure is the seller quoting?), you need to find out what else is in store. Are they going to be replacing the roof, adding fire escapes, doing other improvment work under the Decent Homes standard etc etc? Ex-LA leases often include provision for improvement work which private sector leases usually don't (so I'm told, have never held one). Whilst there are avenues open to you to challenge unreasonable costs for work, it's much harder to challenge the justification for work actually being done, when improvements are allowed in the lease.

Information on major works planned for the next 5 years should be available from the freeholder (I guess you would not be able to get it direct though, it would have to go through your seller, but I may be wrong).

I own an ex-LA property, but it's just a house split in 2 so there are no communal areas, thus there is no scope for the freeholder making major improvement works as all they are allowed to do under the terms of my lease is maintain the roof and external walls.

I did recently have the roof replaced. The procedure was that they sent me an estimate for the work, then the work was done and a couple of months after it was finished, they sent me the actual bill (which was less than the estimate ). So if you were to complete your sale before the final bill is available, you could be liable for more costs since the seller would only be able to use the estimated cost in the price negotiation.

Hope that was of some help!