Difficulty with asking EA questions about buying a leasehold flat. Maintenance etc

richimgd

Hi there,

I have shown some interest in a 2 bedroom first floor flat that I went to look around about 2 weeks ago. It’s the 2nd flat which is part of a semi detached Victorian villa – so quite an old building with period features etc. The owners have emigrated and currently have someone they know living there on quite a casual tenancy arrangement. The flat came on the market for quite a lot 1 year ago (about £180k!). Netprieces suggest they paid about £175 for it 4 years ago. Its been slowly reduced up until now where it is on for £160. I think it is still way over priced for me but I am going to try and get more info so I can put an informed offer in. When I went to look around there were a few things which flagged up - not all of them direct questions, just some concerns.

1. The whole property is single glazed so I would need to budget for getting them updated at some point. At a total guess I recon this must be around £8-10k since the building would need to have the relevant sash windows to match the building. I might ask some local companies for some ball park costs. I know you dont know the flat but from a very loose description of the type of property would this seem like a fair amount of cost to budget?
   
   
2. The fire in the front room is open and although it looked like there is coal in it apparently the owners in the 4 years they have lived there claim they have never tried using it – even despite the fact we have had some pretty cold winters of late. I find this very hard to believe. The EA have been very dismissive of any questions concerning the fire – almost like I was focusing on a small detail, when really its quite an important part of the property! I can only conclude that the fire probably does not work or is not safe to use and to put a gas fire in I will probably need a new chimney flue / lining. It would be nice if the EA could be a bit more upfront about my question regarding this but so far I have asked about 3 times and nobody has given me any answers. I.e said they would find out but then never did...
   
   
3. There is a £40 per month maintenance charge. I have asked to clarify what this covers? It apparently covers some general maintenance and repairs + the electric in the communal area + painting of the communal area. I don’t know how far the money goes and if any of it is accumulated into a pot. If there is a fund, how much is in it and would it be enough to cover any fairly big jobs? Do all flats pay the same amount? Is there a maintenance company and how much do they charge? I basically want to check if there actually is any pot of money in case something ‘big’ needs doing or does all the money only just cover the basic upkeep of the building leaving nothing for emergencies. I had looked around another flat where the maintanence was £60 per month and it was going to go up. The occupier said it was this expensive so that it would contribute to a ‘just in case’ fund - not sure if that just their excuse for the higher than average price? I don’t really know if it’s worth me expecting the EA to go into any detail at all with this – so far my questions have just touched on the first points and so far I have not heard anything back from them other than the initial basic info I was given. I might write to some of the neighbours and see if they can help answer any of the points but can anyone advise what I would reasonably be able to find out before having to pay a solicitor to look into it for me?
   
   
4. Who is the freeholder? The EA seemed a bit shocked on the phone when I asked this. Surely this is a very very basic question? It’s almost like I have asked the world and they simply cant be bothered to go and find out. Is this not their job?

I have shown an interest in a property they have been given the job to sell and they appear to not be bothered about answering my questions. I have asked questions to a 3 different people from the EA company and as of yet nobody has been in touch. I did say I am keen to make an offer but would like these points clarify so I can make an informed offer. If I was the seller I would be absolutely fuming to find out how little the EA have done to answer a potential buyers questions.

You’d think potential buyers would have EA’s all over them when they show even a slightest bit of interest when the market is how it is..! The exact opposite seems to be true...

Reading this back I seem to sound quite angry, but honestly I have been very polite when speaking with the EA - its just after speaking with them each time I think they must be taking the p*ss a bit...

vectistim

How many flats are in the building? You say its part of a semi-detached villa, which suggests to me it may be only two or three. If that is the case the maintenance, ground rent and buildings insurance set up may be less well defined than with a larger development.

There is probably nothing for them to find out regarding the chimney. The current owner has probably never had it swept or used it properly, so you would have to get your own chap in to check it out.

Why do you need to know who the leaseholder is? Do you mean the freeholder (and any management company)?

That seems like a lot of money on double glazing for a flat.
Since you're asking about double glazing and chimneys it sounds like heating bills may be a concern, ask to see the Energy Performance Certificate.

Much of the stuff you're asking (details of the lease, management accounts etc) is frequently left to solicitors to sort out, but more awake purchasers do ask about such things beforehand.

cattie

First of all, it's no good asking an ea anything about the lease or the freeholder, as they simply will not know. These kind of questions need to be asked of the owner as they are the ones with the relevant paperwork. Or the solicitor handling the sale.

£40 month service charge is absolutely peanuts and after your contribution to buildings insurance, there will be very little if any left over for a 'pot' after electrics and general maintenance have been taken out. It is quite common for leasehold property owners to have to dip into their own cash reserves to fund any major works needed to the building.

It depends on whether there is much difference in the size of the flats, but usually if one is significantly bigger than another, they will pay a higher service charge, but this is all down to the freeholder.

Your estimate for windows seems high, but without knowing how many windows and the approx size, nobody could say whether the cost is near to your estimate or should be lower.

As for the fire, it's common for people to have an open fireplace that they have never used. I've bought 2 or 3 properties where owners haven't used the fire. With central heating, lots of people don't see the need for additional heating. All you need to do is get the chimney checked out and cleaned when you move in, prior to having a gas fire fitted if this is what you want.

So really, you are getting yourself stressed unnecessarily and directing you anger towards the ea when in truth he is not the one who can truthfully answer such queries.

hazyjo

No such thing as a 'casual tenancy'. That might cause issues if they have a mortgage on the property.

Is it England?

Just offer what you feel it's worth - check out what similar nearby properties have sold for.

1. No reason for reducing the price. That'd be your choice to change any windows. Or it's considered ongoing maintenance - unless you can't tell the windows are rotten or something and a surveyor points it out.

2. Lots of people can't be bothered using a real fire. I had one in my last house (was there 4 years) and wouldn't have bothered with it myself. Hubby lit it a dozen times or so. I presume they have central heating?

The EA goes on what they're told. If the vendors have told them it works, that's all they will be able to tell you. If the vendors say they've never used it, I have no idea how you think the EA or the vendors will know if it's in working order or if anything needs replacing. They will ignore your question as I doubt they are going to know the answer.

Get some sort of 'chimney inspector' round if it's important to you - but that will be at your cost. If they're marketing it as an 'open useable fire', then maybe you'd have rights to try and knock down the price. If there's nothing wrong with it and maybe just needs a sweep, that's down to you, IMO.

3. Your solicitor should find out all this. I would never ask or trust the EA. It's standard to pay a service charge in a flat. £40pm is cheap. I know you're reluctant to pay for a solicitor at the moment, but that's something I would only trust them to find out. Feel free to knock on doors or write to other owners/tenants, but it's a bit early days I think - plus they still might give you wrong information.

4. Do you mean 'freeholder'? You would be the leaseholder if you owned it. Do you mean you want the names of the other leaseholders? Even if you do mean the freeholder, I have never heard of anyone interested in buying a flat contacting the freeholder. Why would you need to, especially if there's a management company? Or is it what's commonly known as 'share of freehold' and the freehold is owned jointly by the leaseholders?

How many flats in the block?

Jx

richimgd

Cheers for the reply.

All together there are 3 flats on one side and 3 flats on the other.

Maybe I assumed that the owners would have tried using the fire. I actually checked with a fireplaces company and it seemed quite reasonable to fix. Could probably have a gas fire fitted and chimney lined from around £1k.

I meant freeholder (have edited OP). Yeah I think it would just mean so I would know who owns the freehold as is it say the garden flat or someone else - just so they can be contacted if need be. I'm not really sure why I would need to know this specifically but I thought it would be something I would need to know.

The EPC certificate seemed to be quite far fetched to be honest. It was about 60/100 currently and with a potential of 62/100 from what I remember. You'd expect greater gains from installing double glazing throughout the property? This wasn't the full EPC, only about 2 sides of A4 that was photocopied and attached to the info leaflet. There is no mention of single glazing on it. I have previously seen EPC's with many pages so I'm not sure if I have been given the full certificate or not.

I think the main thing was to see if there was any maintanence fund. I.e if they is for example £10k accumulated into the account then it will go towards any big job that needs doing. I'm not sure if this would happen in these circumstances? In 5 years 3 x £40 per month would add up to about £7200 - so the question would be does any of this money accumulate to any slush fund or does it get used up on basic 'light maintenance'.

I'm totally new to this so only asking questions I am generally interested in finding out. Like you say I might need to leave some of this to my solicitor. I'm just being tight and want to avoid paying anything until I really have to

richimgd

Cheers for the replies, just noticed everyone elses after posting that last reply.

I think I have probably gone into too much detail then with my questions and really it is me who is inexperienced and not sure what to expect. I think the main thing left to clarify is the maintanence but by the sounds of it I cant really expect much of an emergency pot with people paying just £40pm - although I would still like to check.

I guess if I ask the EA to get a copy of the lease then I should be able to get my solicitor to check it.

About the owners. The have emigrated and since they didn't sell the property before they have a friend living in it paying some rent. I say casual because by the sound of it that is what it is - as soon as they sell it they are apparently not going to leave much notice to the tenant - probably no more than 1 month notice since there is no minimum contract from what I understand.

vectistim

On your two pages of EPC there should be an 'RRN' 1234-5678-9012-3456 which you can use to access the full EPC. (Actually I don't think you need that any more and can just search via post code at epcregister.com)
Double glazing tends not to be a very effective improvement (and in EPCs produced before Easter wouldn't have been included in the change from current to potential rating as only cheaper measures were considered for that graph), a change of only two points would suggest maybe only changing light bulbs, or perhaps adding radiator valves.

It is likely that most of the maintenance charge goes on buildings insurance, its _possible_ if they've only presented one figure that it might include the ground rent too. But in a small development it is unlikely that much will exist.

By way of an example: We have one flat of two in a building, both flats pay their ground rent to the freeholder, we arrange the buildings insurance and the other flat pays us half each year. That's it. No management company, no maintenance account. A few years ago there was a leaking downpipe so I got up a ladder with some sticky stuff and rectified it. I believe the lease may say something about maintenance, but I have no idea what offhand - either a fifty/fifty arrangement, or one deals with the top, one deals with the bottom.

The agent almost certainly won't have a copy of the lease; it wouldn't surprise me if the owner doesn't have one. So, you can ask to see a copy of the lease, but it may have to wait until the sellers instruct solicitors and start gathering paperwork.

cattie

richimgd wrote: »

The EPC certificate seemed to be quite far fetched to be honest. It was about 60/100 currently and with a potential of 62/100 from what I remember. You'd expect greater gains from installing double glazing throughout the property? This wasn't the full EPC, only about 2 sides of A4 that was photocopied and attached to the info leaflet. There is no mention of single glazing on it. I have previously seen EPC's with many pages so I'm not sure if I have been given the full certificate or not.

Before the regulations changed this year, EPC's done earlier were much less involved and only covered a couple of sheets of A4 paper


I think the main thing was to see if there was any maintanence fund. I.e if they is for example £10k accumulated into the account then it will go towards any big job that needs doing. I'm not sure if this would happen in these circumstances? In 5 years 3 x £40 per month would add up to about £7200 - so the question would be does any of this money accumulate to any slush fund or does it get used up on basic 'light maintenance'.

As mentioned in my previous post, £40 month is too small a figure to cover much in the way of an emergency works fund. You are working out your figures without making any deductions for buildings insurance, which you must contribute to and is usually the main thing that service charge covers, especially one as low as £40 month. Then there is the general maintenance etc. Plus if there is a management company in place, they would need to be paid from this service charge too.

I'm looking at downsizing into a flat soon and service charges range from around £1k-£2k per year at the properties I'm considering.

richimgd

Hi, yep the £40 per month does include building insurance and ground rent so maybe this is not so bad after all. I would rather pay less per month then save a bit of money to one side myself so I had my own emergency fund rather than pay a management company who would take their fee and if I moved out I would not get the money I paid back.

Ok thanks for the help so far. I have started to get some rough ideas of costs on the windows from a couple of companies. I am waiting to hear back from one about prices and the other one said they wouldn't give even rough prices without doing a proper survey.

One interesting point which was mentioned from the company is the older builds often need planning permission even to put new windows in - if they are individually owned flats. They said the council can reject planning requests even if the windows are in keeping with the building. I looked into this and I'm not sure if this would be the case if the building is listed - if so the property I am looking at is not listed.

propertyman

Planning permission is only part of it.

You must obtain a copy of the lease to see if

1: if the windows are demised to the leaseholder and theirs to repair/replace or
2; retained by the landlord to repair paint etc the cost of which is added to the service charge
3: if 1, is the landlords permission is required to permit changes
4: if the LL is required to paint externally and you pay a %, then does the lease allow that % to be altered to reflect that you have plastic windows? If it is a fixed share, then if the outside is painted, you still pay that same share of the overall cost even if your windows aren't painted. That's how it works like it or not

richimgd

propertyman wrote: »

Planning permission is only part of it.

You must obtain a copy of the lease to see if

1: if the windows are demised to the leaseholder and theirs to repair/replace or
2; retained by the landlord to repair paint etc the cost of which is added to the service charge
3: if 1, is the landlords permission is required to permit changes
4: if the LL is required to paint externally and you pay a %, then does the lease allow that % to be altered to reflect that you have plastic windows? If it is a fixed share, then if the outside is painted, you still pay that same share of the overall cost even if your windows aren't painted. That's how it works like it or not

Oh right I see. Thanks for this information - I will have to find out. I know that out of all the flats (6 in total, 3 each side) only 1 has had its windows updated apparently. Perhaps it might be easier to try and contact this flat and ask them! This I take it is one reason why I would like to know who the freeholder is so if he needs to give permission for any of these requests he would be there to do it. Currently I don't know if the freeholder lives in one of the flats or not as the EA seemed to be a bit shocked when I asked them who the freeholder was - I thought it was something that they should already know or at least should be easy for them to find out...