Buying flat - 13 items of s20 major works with no estimation - URGENT

Black_bird

Dear all, I would like to ask for your advice on the below:

I have made an offer to a flat 2 months ago, and the seller took 2 months to send me the contract and pre-assignment pack.

When I made the offer I was told there are no major works lined up. But in the 5 years pre-assignment pack there are 13 items listed under future major works, including structural repair, drainage works, roofs repair etc, for my block which has 16 flats.

There is no estimate for any of the items, the fine print says "the actual scope of any future works and the actual costs will be subject to surveys, leaseholder consultation and tendering procedures".

I asked my lawyer to find out more about this, she just forwarded my email to seller's lawyer, and seller came back saying they talked to the freeholder and are not aware of any future major works. Seller also threatened they want to put the flat back onto the market for higher price, if I don't proceed immediately.

The flat is an ex council flat in London prime location, but now owned and managed by a housing association. I talked to the ownership team in the housing association, they refuse to give me any information since I am not the leaseholder, but have indicated a full scale of work as such in other estate they have done have costed around £35k-£40k.

My lawyer is not giving me any more information/explanation. (Lawyer is referred by estate agent and they are both pushing me to proceed.)

Does this mean there wont be any major work as seller has confirmed? Maybe the consultation hasn't started, no notice was served and the seller really doesn't know? Does it mean once the survey is done, not all items will be carried out and the total cost could be less? Or does it mean all 13 items will be carried out and could cost £40k plus? I am a first time buyer in the UK and have little experience. How risky is this investment?

Any thoughts please? I would need to decide today or tomorrow if I am to go ahead, before seller puts it back onto the market. It is unlikely they are willing to negotiate on price.

There are also past major work incurred not billed, as well as unpaid service fee, the seller has agreed to set up a retention fund. Seller also told me the length of lease is 97 years, after the search it is actually 92 years.

Thanks very much in advance.

lovehackney

Run away. Sounds like a nightmare.

[Deleted User]

I had a similar experience, but am only 1 year into ownership. It would be really useful to hear from other ex-LA leaseholders with more knowledge.

- estate agent said lease 115 years, no works planned, service charge 50 pcm
- assignment pack said lease 96 years, service charge 120pcm. £4k of works already passed section 20 (so the price is fixed, but the date of work isn't), plus another £8k anticipated in the next 5 years.
- I looked into the lease situation and decided I could live with 96 years.
- The service charge was annoying, but just one of those 'oh, we passed on the information in good faith' things you can do nothing about.
- I decided I couldn't afford the upcoming works, with my then-budget; and asked for a reduction in the price. I pointed out via the estate agent that 'now you are aware of all these things, you will have to tell them to future buyers up front, and you will have trouble beating my offer, and it will take longer to complete the sale'.
- vendor agreed to reduce by £4k.
- I bought the flat, and the section 20 works haven't happened yet, and they haven't started costing up and consulting on the rest yet.

The fact that I'm only 1 year in - I can't say how the anticipated future plans translate into actual work, e.g. when, how much etc.

All I know is that I will have some warning in terms of the consultation before the works happen, and that I will have the option to spread payments over 2 years.

However, at least I have a rough budget and timetable (12k by 2019). I'm not sure I would have taken the plunge if it was a blank cheque as in your case (!)

I would try again to get answers out of your vendor, via solicitors and via estate agents. You could also try via the other people in the block, leaseholder association, etc.

[Deleted User]

p.s. Your solicitor is acting on YOUR BEHALF not the estate agent!
They should be working for you!

Out,_Vile_Jelly

Ex council flats are notorious for massive maintenance bills. You need to make an informed decision before proceeding. If the vendors want to put it back on the market they will only come up against this issue with the next person to make an offer.

[Deleted User]

200 people looking at this thread - has anyone seen the £10/15k cap over 5 years in practice?

http://www.localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=19595%3Adclg-issues-new-cap-on-charges-to-leaseholders-for-improvement-works&catid=60%3Ahousing-articles&Itemid=28

My interpretation is that it applies to councils who are getting some money from central government for improvements on behalf of their social tenants, can't charge their resident leaseholders more than the 5 year cap.

££sc££

"Does this mean there wont be any major work as seller has confirmed?" no. just because they haven't received the consultation yet doesn't mean it's not in the pipeline for near future. sounds like freeholder has advised of scope of works in pre-assignment pack. works could be lot more or less, when they actually survey and tender etc. is there a sinking fund towards the cost? - how much is in it? to be honest I think I'd be walking away.....we (as freeholder) did have a sale where section 20 works were expected to take place in next 24 months. estimate was ~£15k per leaseholder. vendor left a £15k retainer. I'd ignore anything the vendor and estate agent says and only listen to your solicitor and any info he reeves from freeholder. good luck

G_M

Of course the estate agent is pushing you to exchange. He wants his commission. And since the solicitor is hand in glove with the EA (why oh why did you do this!!?) he is under pressure to do the same (though he shouldn't).

Local Authority? Costs will be high.
Seller denies knowledge? Don't rely on this - the works are coming.
Sinking fund? Now, if there is a substantial sinking fund o pay for the repairs, then proceed (cautiously). If not, pull out or demand a 'retainer' from the seller to cover this future cost.

AdrianC

G_M wrote: »

Local Authority? Costs will be high.

The OP said ex-LA, now HA owned and managed.