FTB negotiating price on leasehold with roof requiring £££ repairs

torridonscot

Hi all,

Apologies for starting a new thread but I'm stressing like mad not knowing what to do! I'm a first time buyer so I'm literally going mad as I've got no one experienced to advise me. Gist of it is:

- buying first floor leasehold flat with 98 years left on the lease, £75/year ground rent

- victorian building, 4 flats, all leaseholders.

- homebuyer report came back with 3s on roof. Had a roofer do a survey (he spent a good 45 mins and got paid £100 for it) and estimated works at £5000 (excluding putting in a missing firewall)

- roof structure is good but badly maintained (not leaking yet) and it's a large building so scaffolding will be required hence expensive.

- lease says every leaseholder pays a "reasonable proportion" of expenses although the proportion is mentioned in another paragraph (see below) which I can't make sense of!

- service charges and sinking fund are mentioned in the lease but without specifics. In reality the vendor has said there are no service charges.

- found out freeholder's name from land registry and googled them. Found a number of posts from other people who complained about this freeholder overcharging for repairs, charging for repairs not being done and generally being difficult. They were taken to LTV twice and leaseholders won.

- I have read the notes on lease-advice website and I think I have a good understanding of my rights as a leaseholder.

- my solicitor is basically refusing to advise until they have ALL the paperwork (even if they have the lease) and the vendor still hasn't got all the paperwork ready.

Now there are 2 issues

1. Is it reasonable to ask for a reduction in price of £1,250 from the vendor? What should I arm myself with when doing so, I've got homebuyers survey, written quote /assessment from roofer (he got paid £100 for it and spent about 45 mins looking around), photos he took up there. Should I negotiate through my solicitor or the estate agent?

If I pull out now I'm stand to lose around £1,000 anyway so this isn't a deal breaker but I'd like to think it's reasonable to expect some reduction.

2. The other issue is more difficult and I know it's my responsibility to make the decision but any advice is very welcome!

Should I purchase a leasehold flat with a lot of work needed which the other leaseholders would most likely object to given the cost (no sinking fund means a huge bill for them). Even if they don't, the freeholder sounds like they overcharge for repairs and are not the easiest company to deal with.

Context:

- agreed price is £194k and similar properties in the area sold in the last 2 years sold at around £200k so it is a good price, desirable area.

- will probably sell in 3-4 years so any repairs to roof during my ownership will likely be a plus when selling (true?)

- I'm currently renting so finding anything decent that's similar will cost me £900 rent compared to the cost of owning £585/month avg (yes I've factored in cost of mortgage, repairs to roof, extra insurance, ground rent, lost interest and potentially £50/month service charge). With all upfront costs legal, moving etc the cost of buying would offset the cost of renting something similar in 3 years.


Relevant lease snippets

Pay all rates taxes charges assessments and outgoings whether Parliamentary parochial or otherwise which now are or which at any time hereafter shall be assessed or imposed upon the flat or any part thereof PROVIDED that if the local or other appropriate authority should decline to assess the flat or any part thereof separately in respect of the said rates taxes charges or should decline to collect the same from the Lessee then the Lessee will repay to the Lessor a sum or sums equal to the proportion which the rateable value of the flat bears to the total rateable value of the four flats in the building at the date on which the flats were first rated of the said amount or amounts which the Lessor shall from time to time pay for or in respect thereof and the said sum or sums shall be treated as additional rent and shall be due on demand PROVIDED ALWAYS that nothing herein contained shall impose upon the lessee any obligation to pay or discharge any tax on or arising out of or relating to the grant of this Lease or any tax pauable by the Lessor in respect of rents and other payments arising under this Lease or any tax payable as a result of any dealing with any reversion immediately or mediately expectant on the term hereby created or any other tax which in the first place is assessed charged or imposed upon the Lessor or is referrable to the Lessor's interest in the demised premises.


The expression "expenses and outgoings incurred by the Lessor" as hereinbefore used shall be deemed to include not only those reasonable expenses outgongs and other expenditure hereinbefore described which have been actually disbursed incurred or made by the lessor during the year in question but also such reasonable part of all such expenses outgoings and other expenditure hereinbefore described which are of a periodically recurrding nature (whether recurring by regular or irregular perios) whenever disbursed incurred or made insofar as it relates to the period from the date hereof including a sum or sums of money by way of reasonable provision for anticipated expenditure in respect thereof as the Lessor or the Managing Agents may in its or his discretion allocate to year in question as being fair and reasonable in the circumstances.

Any advice greatly appreciated!

DannyboyMidlands

I saw the photos in your previous post and personally wouldn't buy a leasehold flat where the fabric of the building is in such poor condition. Walk away.

I also wouldn't buy any flat if I was intending to move in 3 or 4 years. I don't think it's worth the expense or hassle.

Fire_Fox

You need to know more about this reasonable proportion. Are you intending to renegotiate again when you have the firewall quote? That is not the done thing. Is your solicitor waiting on the freeholder's queries? These are highly relevant to your renegotiation.

I'd reduce in writing to the vendor via the estate agent, you don't have to justify the actual amount. Draw their attention to the times the freeholder has been taken to the LVT (date, place, result) as well as the work that is required. The issue here is historic poor maintenance, little provision in place for resolving this, shyster freeholder, needing to go for Right to Manage or to the LVT, this is all a lot of hassle and reduces the value. Don't underestimate the worth of your time.

I'd want to know if all the neighbours are aware that their freeholder has been taken to the LVTs, how expensive the repairs are likely to be and if they are open to self managing.

torridonscot

Firefox you make very good points as you have in my other thread. What do you mean by "That is not the done thing", is that in relation to the firewall?

My solicitor is still waiting for paperwork from the vendor's solicitor (!!!) so it may take a while before they are able to put queries to the freeholder. So I should wait for those queries before negotiating?

I'd want to know if all the neighbours are aware that their freeholder has been taken to the LVTs, how expensive the repairs are likely to be and if they are open to self managing.

I was thinking of going round again to talk to the neighbour now that I have more facts. I'd like to arm myself with as solid a case as I can for a reasonable reduction in price.

torridonscot

DannyboyMidlands

I appreciate your thoughts. I am a FTB so I really do not have an idea what constitutes poor condition or not as to the naked eye the property looks in reasonably good condition apart from the roof. Yes, it needs repairs but the structure is solid and the walls and the rest of it seem in good condition, no sign of dampness so surely there are worse conditions a victorian building can be in!

As for the cost and hassle, yes I appreciate that it's a lot of hassle and cost but the cost of renting for the next 3-4 years is the same as the cost of buying and owning for that length of time. And I would be living in my own place rather than a small 1 bed/studio! That for me makes it worthwhile.

DannyboyMidlands

Yes, a building could be in much worse condition but if it was a freehold house you would just think that the vendor is a lazy so and so and that things will be different on your watch. Everything is under your control.

But you are about to knowingly buy a flat where the freeholder does not keep the place well maintained. I don't see any reason to do that. It'll be an ongoing nightmare.

thelem

torridonscot wrote: »

What do you mean by "That is not the done thing", is that in relation to the firewall?

I took that to mean that once you've got a quote for the firewall you'll then want the price to be reduced further. It would be better to wait and ask for one big reduction (which isn't unexpected after a survey), or the vendor will be wondering how many more times you'll try and renegotiate the price.

torridonscot

thelem, that makes sense :-)

Fire_Fox

I meant you can't renegotiate now based on the roof then renegotiate again later based on the firewall or other issues. The more the estate agent, the other party's solicitor and all the leaseholders know the less likely there is for another sale to progress if you should pull out. They should not be hiding the roof situation and the freeholder situation from future buyers. Letting the cat out of the bag to all and sundry gives you bargaining power.

If you proceed there is cost and hassle which should not be underestimated, but you seem to be very willing to do your homework. Few leaseholders are aware of the existence of the LVT let alone aware that their freeholder has lost cases there. Many leasehold disputes we see here on MSE drag on and are nightmares at least in part because the leaseholders are handling it badly and not using the legislation as it is laid out.

Seems to me you need a bargain based on the current situation, then you resolve or improve it and add value. The freeholder is only a nightmare whilst they manage the place, not if you have right to manage. LVTs are designed to be user friendly, but you don't want to be in and out of there every year trying to get stuff done and then disputing the cost. It means the owner won't get market value for his property, but that is the price you pay for laziness.

Richard_Webster

I have to agree with Dannyboymidlands. You really cannot assume that it will be sorted quickly or at all. Legal rights are one thing - implementing them quite another.

Buy another flat.

torridonscot

Richard Webster, I've been reading your posts with interest during my research, thanks for posting:). Sadly there are no other flats in this price range and area that are anywhere near as good as this one. Given that it's October now it's unlikely I'll find something else before spring at which point my mortgage offer will have expired, I'll have to start over with £1000 down the drain.

Having said that, I went round and talked to one of the other leaseholders. He invited me in and we had a nice chat. The gist of it is they try to have as little dealing with the freeholder as possible because yes they are nasty and try and overcharge. No service charges, hefty building insurance but that compensates the very low ground rent.

When things need doing they get quotes and get things sorted themselves and split the cost. One time they approached the freeholder with something that needed repair, they gave an extortionate quote so this guy threatened to take them to LVT. Freeholder dropped the quote and leaseholders sorted things out themselves. That's how it seems they do things - painting the building, fixing drains, carpeting communal areas, etc.

All 3 leaseholders lived there for at least 10 years and obviously care about the building as it's well looked after. The roof issues that you can see from ground were noticed and they were getting round to getting them done but someone with a ladder and surveyor obviously exposed a lot of repairs needed. I took all the photos and roof survey and he said we'd get quotes and get needed repairs done.

And the vendor had builders round today fixing some stuff on the roof but I have no further details. It will be patching things up obviously and more repairs will be needed but it's certainly brightened the outlook.