Flat with no Management Company

Cognito

hello all, new here, first post, etc.

I called an agent to enquire about a flat and they told me there's no Management Company for it, the building's uninsured, it would be up to me to set it up to validate the lease and so on... where does that leave me legally, and financially? please be as elaborate as possible as I honestly don't understand one bit of it. if there's information on that situ somewhere, I would appreciate a link. thanks again

Fire_Fox

Who is the freeholder and why are they not insuring and managing the property? Wouldn't touch it with a bargepole unless it's ridiculously cheap AND passes a full structural survey with flying colours. You might well find it difficult to get a mortgage. Who are the other leaseholders? Why aren't they working together to get the insurance and management sorted?

If you are thinking of leasehold read this website inside out and back to front
http://www.lease-advice.org/publications/

G_M

Whi is the freeholder?

Or is a share of freehold also being sold?

How big is the property? How many flats/leases?

What if anything do you know about the other leaseholders? Or Share of Freeholders?

Cognito

I don't have most of that information myself, that's why I posted...

the agent(s) I spoke to said they don't know why exactly there's no management company, possibly there was one but it went into liquidation. the flat looks good, and the agent estimates the current price at maybe 2/3 of its value "once things have been sorted out". they pretty much ruled out getting a mortgage for it, and suggested I insure it myself immediately if I buy.
there's 3 flats in total in the building (or so I'm told), one is buy-to-let and the other owned by someone who (again, I'm told) is keen on getting things sorted.
the agent said "as they understand it" there are 60 years left on the lease.

thanks for replying, any insights very welcome

Fire_Fox

Download a copy of the headlease (for the building) and the long lease (for the flat) from land registry - £2 each. Check Companies House for the freeholder/ management company/ managing agent/ any company named in either document, see if there is any info about company being struck off and Google the name(s) to see if any info about bankruptcy.

Use the LEASE calculator to estimate costs of extending the long lease, add a wedge on for legals and see how the total matches up to land registry sold prices for the street and area. Ignore estate agents valuation they work for the seller not you.

60 years is not mortgageable, you would need the existing leaseholder to extend the lease or at least serve notice on the freeholder (see LEASE website). Are you a cash buyer? If the freeholder is bankrupt or absent you may need to go to an LVT ideally with the other leaseholder(s). Do not expect the BTL to be easy to deal with, they may want as little hassle and cost as possible.

You can band together with the other leaseholder(s) and self manage. Again see LEASE already linked to. Don't think the flat looks good have a survey done, you need to know what you liabilities are likely to be over the next few years, repairs are expensive, going to the LVT is cheap if you DIY expensive if you get a solicitor. Extending the long lease is expensive.

Ask more questions, it's the estate agent's job to get answers so you buy the place: possibly is no use to you or us. Best thing is to write a long list of questions about the freeholder, current ad hoc management, debts, service charges, length of lease, what is included in the purchase price, any known problems with repair or maintenance the building. The estate agent will hate you and try to fob you off saying that is a solicitor's job, it is to get the legal answers, but semi formal responses will save you wasting money going ahead. If you go ahead appoint a conveyancing solicitor who specialises in leasehold disputes, NOT any old conveyancer.

Land_Registry

Fire_Fox wrote: »

Download a copy of the headlease (for the building) and the long lease (for the flat) from land registry - £2 each.

Probably just a typo by Fire Fox on this one as the fee is £23 per lease. You can't download a copy though so would have to make a paper application as per our online FAQ
NB - customers who are signed up to our online e-services can obtain and download some documents electronically and at a reduced price. These are however nornally property professionals such as conveyancers, solicitors, lenders and so on

propertyman

Cognito wrote: »

where does that leave me legally, and financially?

In simple terms, the party to the lease manager , a company that was made up of the residents undertook to carry out the landlords functions or repair insurance etc. They may have been the landlords ( a freeholder or head lessor) as well.

There is therefore no one under the leases responsible for these functions and accordingly no lender is going to be giving you a mortgage.

There are many way to resolve the situation, depending on the precise set up but in most cases it involves full agreement of the other owners and considerable legal costs from £1000 to £3000 per flat. If it also involves reclaiming ownership of the freehold or head lease that too will be added.

G_M

Land_Registry_representative wrote: »

Probably just a typo by Fire Fox on this one as the fee is £23 per lease. You can't download a copy though so would have to make a paper application as per our online FAQ

Or Fire Fox may have been suggesting downloading the FREEHOLD TITLE (for £3, not £2) to identify the name of the freeholder. (from here).

At this stage, best advice is to gather as much info as possible from whatever source:

* pressure the agent to obtain info from the vendor - make them work for their commission!
* knock on the door of the other owner/occupier (don't bother speaking to the tenanted flat) and have a chat - if nothing else you'll find out what your prospective eighbour is like, and may learn a lot about the building management
* obtain documents from Land Registry
* speak to vendor direct
* etc

Land_Registry

Good point G_M - £3 for the register and/or £23 for the lease

Fire_Fox

Thanks for correcting/ clarifying chaps.

Cognito

thank you all very very much for your replies...

propertyman wrote: »

If it also involves reclaiming ownership of the freehold or head lease that too will be added.

where do I find how much that would be from?