service charges leasehold flat

la_farfallina

I am toying with the notion of buying a leasehold converted flat in a large house. I can't afford to buy a house and don't want to pay rent indifinitely.

I have heard the horror stories of huge service charges in ex local authority flats and wonder if anybody knows if the same thing can happen in a leasehold flat in a house?

Has anybody bought a converted flat and what are the pros and cons?

Thanks in advance,

Farf x

G_M

The age/condition/type of building makes a difference. A big, old, poorly maintained house conversion could be in poor condition and need money spending in the future. This will be divided somehow between the flat/lease-owners.

The management arrangement makes a difference. Some are managed by the freeholder; Some by professional (profit driven!) management companies; some by formal management company set up/owned/run by the flat/lease owners; sometimes its an informal arrangement bewteen the lease owners. And sometimes there's no real working system at all!

So you need to investigate all this, the annual costs, who does it, and how well managed/maintained it is.

Always talk to other people living there!

la_farfallina

Thanks G-M, very useful info.

To give an idea of the type of flat I have in mind..........
http://www.rightmove.co.uk/property-for-sale/property-19472754.html

G_M

So at a guess - 2 flats? Unlikely to be a management company.
Who owns the freehold? It may be jointly owned by the two flat owners, or one of them may own it outright, or it may be owned by someone separate altogether.
Whoever manages, check if the annual payments just cover the basic outgoings (insurance, electricity in the communal hall etc) or whether there is a 'slush fund' built up each year, ready for if/when a new roof is needed or whatever.

But don't get too hung up on all this. If you use a solicitor, they'll check it all out for you. (though I still advise talking to the other flat-owner!).

Richard_Webster

But don't get too hung up on all this. If you use a solicitor, they'll check it all out for you. (though I still advise talking to the other flat-owner!).

Yes, yes, yes!

In this sort of case vitally important to talk to the other flat owner. The smaller the "block" the more important the personalities and attitudes of the other flat owners are - either because they effectively run things or because you need their support to approach the landlord to get something done.

Legal rights in leases are all very well, but not a lot of help if it is disproportionately expensive and stressful (like a neighbour dispute) to get something done through the courts/LVT.

la_farfallina

Thanks for the useful info Richard.
I will make a point of talking to the neighbours. Also, it would be handy to find out that they enjoy midnight samba drumming before I went ahead and made the purchase.

Farf x

Jeffrey_Shaw

Another potential problem is servicing. Be wary if there's no service charge scheme or if each lessee has to insure own flat!

westv

Jeffrey_Shaw wrote: »

Be wary if there's no service charge scheme or if each lessee has to insure own flat!

Do such places actually exist?!

olly300

westv wrote: »

Do such places actually exist?!

Yes.

I looked at a flat when I was buying where there was only 1 other leaseholder and the freeholder did absolutely nothing on the property but send a bill for the ground rent.

You can club up with the other leaseholder(s) but if you don't get on with them you have to sort it out yourself.

G_M

My brother lives in a 3 flat converted property. 22 years now. The freeholder owns the ground floor flat but lives overseas and rents it out.
The agents letting out the ground floor flat refuse to undertake any 'freeholder' functions. The freeholder is totally uninterested.

The freeholder has never requested ground rent.
The property has only ever been insured because my brother took it upon himself years ago to arrange it, and, with difficulty, eventually persuade the owner of the top floor and the agent for the ground floor to contribute 1/3rd each.
The lights in the communal hallway only work because my brother put the account into his name. Again, he had a battle (eventually successful) to get the other two to contribute to the communal bill.
There is no service charge.
On occassion there have been repair issues. a leaking roof, rotting window frames, broken gate. In each case the flat owner affected (roof? guess who was concerned?) had to 'persuade the other 2 to agree to repairs and contribute.

The arrangement is very unsatisfactory, but works..... just.

I keep telling my brother he'll have a real job selling as a buyer's solicitor will ask to see proof of ground rent payments, service charge history etc, and most solicitors (mortgage lenders?) would be horrified by the 'arrangement'. Quite rightly. At times it has been a nightmare in the past.

westv

G_M wrote: »

My brother lives in a 3 flat converted property. 22 years now. The freeholder owns the ground floor flat but lives overseas and rents it out.

They can be a nightmare to sell but I think I'd rather have a freehold flat with a proper service agreement for the common parts than your brother's leasehold flat situation!