Valuation nil due to building structural issues

pineneedles

As a FTB we’ve felt out of our depth a lot of the time and so I hope to ask for your advice again as we’ve arrived at a new issue.

We’re in the process of trying to buy a second floor leasehold flat. The survey (Homebuyers) was done last week and we’ve received a copy today. The valuation of the flat has been given as ‘nil’ due to ”possible movement to the building as a whole”. In the detailed section notes on this are given as:

“There is evidence of cracking to the front bay indicating possible ongoing movement. Whilst this does not relate directly to the subject property, there are likely to be implications with regard to service charge etc. Instruct a structural engineer or building surveyor to investigate the cause and full extent of the movement and for all necessary remedial work and allied repairs to be carried out. Costings for the works should be established prior to any commitment to purchase.”

Other areas where a score of ‘3’ is given are

-Evidence of deteriation to the mouldings and parapet walls which needs repair/renewal;
-Evidence of decay to external joinery which needs repair/renewal;
-Flashbanding to the roof and around chimney stack needs replacing;
-Some repointing required to chimney stacks and elevations;
-Evidence of damp to chimney breast (blocked off) within bedroom;
-Evidence of significant damp penetration to front wall in entrance hall;
-Upgrading of the electrical system/ consumer unit should be anticipated;
-Upgrading of the central heating system should be anticipated;

Now we need to decide whether to go ahead and ask for a structural engineer’s report regarding the possible movement and a damp/timber report regarding the damp in the hallway and the bedroom, before a mortgage valuation can be given.

We’re not adverse to getting things fixed in the flat and expected some of the above e.g. updating the boiler, but my concern is that a lot of what is highlighted is the responsibility of the freeholder and it would appear they haven’t been maintaining the building properly.

Would it be solely on our shoulders to have the extra investigations done or should these be done by the freeholder (apart from the damp in the bedroom possibly, though I believe the chimney is the freeholder’s responsibility)?

I know our solicitor has already requested information about planned works to the building. As I understand there would be two possible scenarios – the freeholder is already aware and is planning repairs (obviously the works would mean extra costs for everyone in the building) or that they aren’t aware/don’t care – which I guess would scream “nightmare freeholder, walk away”?

Thanks in advance for your thoughts.

Flashmanchop

I think you need to ask yourself, if, after this reportanyone would lend against it, as if one surveyor has picked up on the apparentissue, another is highly probable to also pick up on it.

thesaint

Look at it as dodging a bullet.

pineneedles

Oh yes, I hadn't even considered of going to a different lender as if the issue is this serious surely any surveyor would pick up on it, but it seemed the lender was saying they may be able to lend if we get further reports as advised by the surveyor.

I hope the day will come when I feel like we dodged a bullet and not just like we've been hit by yet another piece of bad luck.

pinkteapot

I would absolutely run a mile.

These sort of repairs will be expensive and you'll have to pay your share.

It's actually worse if the freeholder is turning a blind eye, as the building will continue to deteriorate and you'll never be able to sell.

It's bad luck that you've forked out money on the purchase, but a survey is worth its weight in gold if it turns up serious issues.

If you want to pursue the purchase you could talk to the other flat-owners about the building and if they know of any repair plans.

CH27

Walk away & don't look back.

AndyGuil

Step 1. Turn 180 degrees around on the spot.
Step 2. Run as fast as possible.

Perhaps gives a heads up to the management company or freeholder that your surveyor found this.

pineneedles

Thanks all. I guess we're lucky to be able to walk away from this and lose only about £1k ... unlike our poor vendors! Feel very sorry for them.

Jenniefour

You're a lot braver than me - after that survey I would definitely be out! That's partly what surveys are for - to detect anything which might indicate it's not a wise purchase or only a purchase for the brave who have some extra money kicking about and know they might take a big hit on it.

I've bought some properties in my time that have needed new electrics and so on, complete do ups - but never been faced with a serious structural issue that brings the value down to 'nil'! And have walked away from two properties in the past that had obvious serious structural issues. Obvious in that I didn't need to get a survey to confirm what I could see in front of me.

Your solicitor is doing the right thing - if the sale proceeds (providing the mortgage lenders are satisfied and will lend) then the vendor should be required to set aside a pot of money to make sure you don't become liable for the structural repairs. Central heating and electrics in the flat are entirely up to you - and assuming the property is priced to reflect that (if not negotiate).

I would be looking for all sorts of other conditions as well - that there is agreement between the flat owners that the work be done, there is sufficient funds in place to do it and so on. But I wouldn't be approaching other lenders - I would be asking myself why on earth I want to proceed. This is possibly not the property to be taking on as a first time buyer. But if you do make sure everything is watertight as possible. There is a thread on here where the leaseholders (or at least one of them) are actively obstructing necessary works being done. You would need to make sure this can't happen. But I would say this is an unwise purchase for FTB's. More for a builder/speculator who has plenty of spare funds in their pocket and a good solicitor if things don't get moving.

GDB2222

pineneedles wrote: »

Oh yes, I hadn't even considered of going to a different lender as if the issue is this serious surely any surveyor would pick up on it, but it seemed the lender was saying they may be able to lend if we get further reports as advised by the surveyor.

I hope the day will come when I feel like we dodged a bullet and not just like we've been hit by yet another piece of bad luck.

It's up to your sellers to find out what all this work will cost, not you. If I'm being uncharitable, they may already know, which is why they want to find a buyer to take their flat off their hands. It's going to be costly and very messy to do the work, so the flat needs to be *incredibly* cheap to make it worth your while even to consider taking it on.

This is not 'bad luck'. It's a mistake you made, and you can learn a lesson from it. You are not just buying a flat. You are buying a share in the building, or at least taking on a liability to maintain it. So, have a really good look round before going to the expense of getting a survey done. It sounds like you could have spotted most of the problems the surveyor found, if you had only opened your eyes.

Jenniefour

pineneedles wrote: »

Thanks all. I guess we're lucky to be able to walk away from this and lose only about £1k ... unlike our poor vendors! Feel very sorry for them.

Sorry, my post a bit late. You've made the right decision!! Assuming you've made a final decision - instruct your solicitor to stop work immediately and return the papers so you're not clocking up a bigger legal bill than necessary.

Vendor needs to get this sorted out prior to selling it - and it's possible that efforts have been made and got nowhere.

Good luck!