Buying a flat in Grade II listed property - Risks?

foxie2011

Hi all

I am considering buying a flat in a building which is a Grade II listed property and it has been divided into flats a long time ago (there are between 20 and 30 flats in the building). My concern is the potential cost of upkeeping and maintaining the property; what experience have the others here got in terms of this, will I potentially end up paying thousands towards unexpected, expensive repairs, if the majority of the freeholders decide to have the repairs done etc? My budget just wouldn't stretch to this! What options would I have?

The annual maintenance fee is reasonable and it makes me wonder... how can it be enough to cover the costs as there MUST be annual repairs needed... it's a bit unclear what this covers and what repairs are due.

Would you advise to not get involved with Grade II properties, generally speaking?

Any opinions and advice are much appreciated.

BitterAndTwisted

I wouldn't touch a Grade II with a bargepole for the reasons you have mentioned. Find out how much of the service-charges on account are transferred into a "sinking-fund" for future large-scale expenses.

mystic_trev

I lived in one, albeit only twelve appartments in the building, for seven years. I also helped run the Management Company (a thankless task) so have a fair idea of costs involved. Sash windows, painted and repaired every three years £30,000. Drive resurfaced every 8 - 10 years £50,000 and if the roof need replacing around half a million! This is without all the other day today maintence costs, such as electics, plumbing and the major expense of garden(ers) upkeep. If you've got deep pockets, fine! Otherwise avoid! I believe similar properties are charging between £4,000 and £6,000 annual.

foxie2011

mystic_trev wrote: »

I believe similar properties are charging between £4,000 and £6,000 annual.

You mean as a maintenance charge?! Jeez. That's as much as 500 pounds a month.

foxie2011

BitterAndTwisted wrote: »

Find out how much of the service-charges on account are transferred into a "sinking-fund" for future large-scale expenses.

That's a good tip, thanks.

southerngirl_2

I'm in the process of buying a flat in a grade II listed building, there is 50 flats and the service charge is currently £140 mth. I asked how much was currently in the reserve fund and what works are planned for the building in the next five years. I received a report showing the estimated outgoings (regular maintenance, internal/external redecoration, planned roof repairs etc) for the next five years and the estimated effect this will have on the reserve fund and the monthly service charge over this period.
I'm prepared to get involved with this particular building. I feel as fully informed as I can be about the situation. I can see the Management Company are planning ahead. I accept that properties like this will be more high risk, that the service charge will increase. It's a beautiful building, perfect location, the flat has everything I want and I accept the costs that will come with buying this type of property.

foxie2011

Southerngirl, thanks for this. Did you get this information you are listing here BEFORE making the offer and/or involving the solicitors? Or only after your solicitors asked for it?

Maybe I should request for the same.

Also, I have a question about the difference between 'share of freehold' and 'leasehold'. Do I understand it correctly that if your leasehold flat also enjoys share of freehold, you basically are partly responsible for the upkeeping of the building; whereas when the freeholder is someone else they are responsible and cannot ask you to cover the costs? Or can they?

What are the pros and cons of 'leasehold with a share of freehold' and 'leasehold only'?

southerngirl_2

I was told about the size of the reserve fund after I had made my offer. My solicitor requested this information (including planned future works and estimated costs) from the management company via the sellers solicitor. You could ask the vendor if they know if there is a reserve fund and how much is in it.
I also asked people who had lived in the building for a number of years what they thought of the management company.

mr_rush

I currently rent a flat in a grade 2 church conversion.

From neighbours who own their flat it seems the maintenance charges are very high with a lot of extra charges. Additional problem with large blocks is that usually you have to use a management company rather than doing it in house. Management companies are absolute rip off merchants and rarely try and find the best deal for anything.

sooz

foxie2011 wrote: »

Also, I have a question about the difference between 'share of freehold' and 'leasehold'. Do I understand it correctly that if your leasehold flat also enjoys share of freehold, you basically are partly responsible for the upkeeping of the building; whereas when the freeholder is someone else they are responsible and cannot ask you to cover the costs? Or can they?

What are the pros and cons of 'leasehold with a share of freehold' and 'leasehold only'?

No, you have completely misunderstood.

Please look at https://www.lease-advice.org for more information.

If you are 'just' leaseholder, you still pay your share of the maintenance, as determined by you lease. You however, have less of a say in the management of the building and apppointment of contractors. For major jobs, of over £250 per leaseholder, you will be formally consulted.

With share of freehold, you still pay the same as it says in yourease. You just have more of a say in the management. But, it may also cause more problems if you & other share freeholders don't agree. And you could be outvoted.

In both cases, you always have to pay your share, as determined by your lease, for the upkeep and maintenance of the building.

foxie2011

Thanks to all who have replied. Very useful.

Sooz, OK so YES it seems that I have misunderstood Thanks for the clarification.

I have got more information from the vendor, actually both him and the ea have been very helpful. The property is managed by the residents, ie they own the management company and have employed a guy to do the gardening, smaller repairs and to negotiate any larger contracts - and this person is one of the residents in the building. They have set the management fee at a level where they are able to save for reserve fund and there is a good lump sum in the fund already.

Does this begin to sound reasonable?