Buying a Flat - Absentee Landloard

_s79

Hi Guys,

A bit of info first off;

I am a first time buyer with no debts and a healthy deposit (25%). I have also got a couple of AIPs in place.

I have found a properly that I like, it was built in 2007 and the previous owner paid £155K. It's in excellent condition and went on the market at £120K. There are two agents tasked with selling the property and they have just reduced the price to £105K. 19 flats in the entire area. Leasehold of 999 years.

The estate agent told me that it was a repossession in the hands of a management company and advised me to place a bid of around £100K. With this in mind I went in low at £90K. The EA put the offer to them and it was rejected but I was told that £95K would be around the figure that they would consider. I thought great, I have got them down a huge amount. I asked them what the service charge / ground rent were and who the management company were, are there any arrears and where do I stand etc before I consider raising my offer.

As the property is listed with two estate agents so I asked a friend to view it with the other agent. The feedback from that agent was that the place would almost certainly go to auction.

The estate agent called me today and said that there is an absentee landlord and that they are now looking for a cash buyer as I/anyone else would not be able to get a mortgage on the property. What has annoyed me is that the same estate agent rent out a flat in the same block so surely they knew more than they were tolling me.

What's my next step?

Is it correct that you're unable to get a mortgage on a flat with an absentee landlord?

Richard_Webster

Mortgage lenders won't know that detail when they make offers so you would probably get an offer. However the solicitor then has a duty to report this to the lender. Some won't accept it at all, others only with indemnity insurance.

It is not impossible but a bit of a lottery because it is difficult to know in advance what their attitude will be to the point. It is a technical one and the people who deal with the initial processing of mortgage applications don't understand this kind of point. So the problem is that you could get an offer and then find later that the lender won't proceed.

In the vast majority of cases the buyer doesn't find out that the landlord is missing until well into the process and often after they have an offer.

_s79

Thanks for the reply.

The latest situation is that the lender if happy providing the solicitor is happy that it meets the CML handbook guidance (indemnity insurance is taken out). The solicitor wasn't me to check that the building is insured, so I have contacted the estate agent to see if they can find this out (they actually rent out a flat in the same block so must have more info) but if this fails I will knock on a couple of doors and ask the tenants/landlords what the situation is regarding the absent management company.