help needed, problems occurred during conveyancing

ArthurSpooner

Hi guys, I need some advice. I'm a first time buyer and I just moved to the UK 2 years ago, so I don't know anything about the buying process here and what's normal and what's unacceptable.

Here is what happened: I came to an agreement with the vendor beginning of January (leasehold flat), but it took them almost 3 months to provide my solicitor with the last three years accounts for the building and the minutes of the latest annual general meeting for the management company. I finally got these at the end of last week and I'm really unhappy about some things I found out there (and I suspect the vendor delayed that purposely, so that I wouldn't have time to look for an alternative flat after I found out about these problems):

1. the block was build 2005, so I expected good quality, but there are already problems with the building, especially a leaky roof and to make that even worse, in the minutes of the management meeting is mentioned, that an "appalling delay by the landlord to undertake the works agreed" took place.

2. there are 1, 2 and 3 bedroom flats in the building (mine is a 1 bed), but all the flats pay the same service charge. I have to pay approximately 1300-1400, if the total costs were divided fairly, it would be 900-1000.

So I'm extremely unsure what to do now. I'm renting at the moment and have to move out by the end of this month, so I would have to look for a new flat to rent if I don't buy now.

I could try to renegotiate the price, but I got it down already from 220 to 195 and I don't want to be too audacious. At least I should be certain what I do if the vendor doesn't accept a lower price, if I want to be consequent then and pull out or if I still accepted 195.
Generally it's a great flat and I was really excited when I found it 4 months ago and even more after I got so much off of the asking price.

Also would you guys recommend to get a full survey? I just had a basic one to evaluate the price as it's kinda a newly build and I didn't expect any problems.

Hope that wasn't too much text to put people off reading it, I appreciate any advice I can get :-)

G_M

Personally I would insist on a significant price-reduction or more likely I'd walk away.

A property that new, with problems (ie roof) is a bad sign.

A Management Company/Freeholder failing to sort the problems is a second bad sign.

And yes, it is unusual for flats of differing sizes to pay the same in service charges.

I know you have both practical and financial reasons for wanting to continue with theis purchase, but in the long term you will regret it.

cattie

A one bedroom flat priced at £220k is ridiculous, unless it's in a very desirable location. Even the agreed price of £195k for a 1 bed new build seems very, very high. What is the location of the flat?

I doubt very much it was the vendor delaying the paperwork, management companies can be notoriously slow & often levy charges for supplying documentation.

If you are not happy about the high service charge ( and they will only ever go up, so beware) and there already seems dissatisfaction with the management company, I would seriously think of looking elsewhere as there are plenty of flats on the market, and new build 1 bedroom properties are quite hard to sell, so usually a glut of them available.

If the roof needs repair & other works then there is a strong possibility that the service charges will not cover this & you will all be asked to contribute towards the repair costs.

Normally I would only bother having a mortgage lenders valuation on such a newly built property as it should still have some of the NHBC guarantee to go, but with a place like this that already sounds defective, I think I'd be more inclined to go for at least a homebuyer's report.

But personally, I'd be off round the estate agents seeing what else might be available for my hard earned money.

ArthurSpooner

G_M wrote: »

A property that new, with problems (ie roof) is a bad sign.

A Management Company/Freeholder failing to sort the problems is a second bad sign.

And yes, it is unusual for flats of differing sizes to pay the same in service charges.

Thanks, my thoughts exactly. It's just that it was so difficult to find something nice in the first place. Viewed so many properties and was so happy when I finally found this one. Would be a nightmare to start again from the beginning. Also when I look online now, there are almost no properties for sale in my pricerange, that are appealing to me.

cattie wrote: »

A one bedroom flat priced at £220k is ridiculous, unless it's in a very desirable location. Even the agreed price of £195k for a 1 bed new build seems very, very high. What is the location of the flat?

It's in central Brighton. I know it's very expensive and when I first started looking I expected to get much more for my money, but the prices here just are like that, you don't get much for 200k around here.

cattie wrote: »

I doubt very much it was the vendor delaying the paperwork, management companies can be notoriously slow & often levy charges for supplying documentation.

Yeah, of course I can't be certain about the reasons for the long conveyancing process. It's just odd that my solicitor had to chase exactly these documents a couple of times, that reveal problems with the flat. And they knew I have to complete before May. If I were aware of these problems in February, it would have been much easier for me to pull out. So the vendor definitely had a motive to tell his solicitor to hold these documents back as long as possible.


What I forgot to mention in my first post was, there was already a buyer pulling out in the last moment. The real estate agent told me 4 months ago, it was an investor and he pulled out unexpected shortly before exchange of contracts because he found a better investment. But now I think that maybe that's not the real reason and he pulled out for the same reasons that are worrying me now.

bitsandpieces

I wouldn't get pressured into buying because you'll need to find a new flat soon. Even if you can't arrange to rent your current place for longer, 6 months rent shouldn't be that much in the context of a £200k flat. Even if you're paying a grand a month rent, you'd lose as much by overpaying 3% for a flat (and also have 6 months mortgage interest to cover). Moving is a pain, but a bad management company, leaking roof etc. can also be a pain. You should also look at whether there is any fund saved up to cover big works on building of the flat you're hoping to buy (e.g. on the roof), given recent problems.

The flat you're thinking of buying may or may not be a good buy at the agreed price (or at a lower price, if you can negotiate this). I wouldn't let short term concerns push you into making a rushed decision, though - you may need to leave your current flat before you can buy another one, but I'm sure you'll be able to find a rental.

Richard_Webster

Yeah, of course I can't be certain about the reasons for the long conveyancing process. It's just odd that my solicitor had to chase exactly these documents a couple of times, that reveal problems with the flat. And they knew I have to complete before May. If I were aware of these problems in February, it would have been much easier for me to pull out. So the vendor definitely had a motive to tell his solicitor to hold these documents back as long as possible.

The seller may have been vaguely aware that the costs were high etc but a large number of flat owners don't really understand the ins and outs and certainly don't understand that their solicitors will have to send a questionnaire to the management company/managing agents/landlord.

Much more likely that whoever had to answer the queries wasn't sure what to put, hadn't got all the paperwork to hand because accounts not ready etc, than that the seller deliberately held this stuff back.

Of course this doesn't help OP's frustration but I think it is more a problem with flats generally than some deliberate ploy on the seller's part.

However much a buyer may seek information at an early stage it is often the case that neither the seller nor the estate agents really understand what is involved - people get ground rent and service charge mixed up and the distinctions between managing agents, management companies, and freeholders, and what each of them do, is generally lost on many people.

One of the few good things about the original HIP concept was that it was originally proposed that management information about service charges etc should be revealed in the HIP. The "HIP provider" companies that mushroomed at the time didn't like this because it was too complicated for them and would have meant employing more qualified (and more expensive) staff to understand what to do - so they pressed the government to leave that bit out!