Buying Flat with problem Freeholder and cagey vendor: should we proceed?

contextual

Hi there,

This week we were about to exchange contracts on a 2 bed flat (in a block of 12), for which we won a sealed bid back in May when the market was a little crazy in London(we bid 20k over asking price).

Just as we were about to exhange our solicitor uncovered the fact that there were major external works to the building which were on the cards since June 2006. Our vendor claims not to know have known the cost, and kept giving us varying figures (5k to 12k) but we have since found out the cost is actually 20k. Naturally, we are in shock as such a charge would have seriously screwed us over after exchange. The tenants apparently agreed the cost at a meeting in Sept 2006 (although the vendor never revealed this info, claiming to have only heard about the full cost last week) and work was due to happen November 2006 - but this has not occurred for some reason, and we are desperately trying to track down the info. The management company is also apparently very poor, and the communal areas are never cleaned and the outside barrier wall having collapsed.

We are concerned about going ahead with the sale if
a) the management company are useless (confirmed by other tenants, although none of them are keen to manage the property themselves or buy the leasehold) and
b) the works appear delayed and there is confusion about what will happen.

If we proceed we are thinking we would drop the offer by 20k back to the asking price (as we believe if the vendor was up front about the work we would have not been willing to go to a sealed bid, and this also may have affected the other 4 potential buyer's bids), and ask the vendor to put 20k into a client account to pay for the works (although they would like to put a 2 year expiry date on the money and there is no guarantee the work will happen or that the costs won't spiral upwards).

We cannot think of any other alternatives, and feel it is risky going ahead but the flat is by far the most suitable for our needs. The market in the area has calmed down a lot since then, so if the sale falls through it may be easier to find a new flat.

Has anyone had any similar experiences or advice on how to proceed or negotiate?

Thankyou!

Doozergirl

I'd do the same. Lying about £20k worth of work isn't exactly insignificant! If you were not aware of it then I would adjust your offer accordingly.

I presume things aren't quite as crazy as they were and also that any other buyer will find out about these works, so the vendor won't find your original offer again in a hurry.