Bought leasehold flat and major work not disclosed

37eeyore

I helped my son to buy an ex local authority leasehold flat, that was being sold by the owners nephew who had power of attorney. When we engaged our solicitor I said I wasn't too worried about searches but I specifically asked her to check if there was any major works in the pipeline. The sale went through and my son moved in on 12th June this year. On 7th October he received a section 20 notice asking for £23,000 for major repairs to the roof, windows, electrics etc. When we contacted the housing association that now own and manage the flat, they told us that the work was first proposed in January. The residents were sent a letter at the beginning of April inviting them to a meeting to discuss the work. When I looked back through the paperwork for the sale, I found the management information pack that the housing association had prepared for the seller. It says that as of 20th May no major work is scheduled. On the front of the pack it says that it is prepared for the seller and is not to be relied on by anyone else. So we are now in the position that the seller says he was told by the housing association that there was no work due, the housing association say the management pack wasn’t for us so we can’t hold them accountable and my solicitor doesn’t want to know. Is there anything we can do as my son can’t afford these repairs. If he had been told before he bought it, he could have negotiated the price or just not bought it.

dirtycredit

I think ultimately it's up to your solicitor to do the digging and advise you of any major works coming up so you can make an informed choice about whether to proceed. Sounds like this just didn't happen. This is probably why they 'don't want to know.' It's their fault!

I'd get all your correspondance together and talk to another solicitor if I were you.

37eeyore

The solicitor says she did her job as she had the report from the seller. I've tried pushing the matter with her but she says I need to speak to a litigator at her firm who will charge £150 per hour plus VAT. She also missed that the previous owner didn't have permission to change the windows. I queried this as well and she said we read all the information and said it was okay. I thought we paid a solicitor to check the paperwork, not rely on us reading it

Angie_B

The solicitor can only find what is declared though. The Information Pack is supposed to detail all of this (I know mine certainly did when I bought and sold my ex-LA flat). If the Freeholder has stated "no major works" as of May but is now claiming they knew about them since January, then you may have cause for complaint; however I don't think your son can get out of paying the bills forever.

Unfortunately, this is part and parcel of owning an ex-LA flat (or any leasehold flat for that matter). Major works are an unfortunate and usually expensive part of that.

Does your freeholder offer payment plans? My last freeholder used to give you various options, i.e. pay up front in total for a small discount; pay over 2-3 years for the declared cost; pay over 4, 5 or 10 years for total plus interest; or if you really couldn't pay, they would put a charge on the property and claim it when you sold. Have you looked into any options available?

37eeyore

The freeholder is saying the report had a disclaimer on the front saying it couldn't be relied on by anybody other than the seller. This seems strange as the seller would only want it to give to the buyer. I feel the freeholder has a responsibility for giving the wrong information as it has put my son in £23,000 worth of debt. They offer an interest free loan for 2 years but that is still nearly £1,000 per month.

ognum

37eeyore wrote: »

I helped my son to buy an ex local authority leasehold flat, that was being sold by the owners nephew who had power of attorney. When we engaged our solicitor I said I wasn't too worried about searches but I specifically asked her to check if there was any major works in the pipeline. The sale went through and my son moved in on 12th June this year. On 7th October he received a section 20 notice asking for £23,000 for major repairs to the roof, windows, electrics etc. When we contacted the housing association that now own and manage the flat, they told us that the work was first proposed in January. The residents were sent a letter at the beginning of April inviting them to a meeting to discuss the work. When I looked back through the paperwork for the sale, I found the management information pack that the housing association had prepared for the seller. It says that as of 20th May no major work is scheduled. On the front of the pack it says that it is prepared for the seller and is not to be relied on by anyone else. So we are now in the position that the seller says he was told by the housing association that there was no work due, the housing association say the management pack wasn’t for us so we can’t hold them accountable and my solicitor doesn’t want to know. Is there anything we can do as my son can’t afford these repairs. If he had been told before he bought it, he could have negotiated the price or just not bought it.

I am a bit confused, you say you have in your possession paperwork from the sale that details the work.

When did you and your son receive the paperwork?

If it was prior to exchange why didn't you read it?

Sorry if I have confused something.

37eeyore

The paperwork for the sale said there was no work due. He moved in on 12 June. On October 7th he got section 20 notice. We then got in touch with freeholder/managing agent who told us the work was proposed in January and letters were sent to residents on April 7th.
Hope this clarifies things.

ognum

Thank you I now understand.

Difficult to say who has wronged you though.

Seller may have had letter of future works but then got document saying no works

Solicitor relied on the information given by the seller and by the HA

You don't say the date of the document saying no work but it would seem to me your most likely comeback would be the HA.

However, these works have happened quickly but it could have come next year or the year after and all those people would have been correct in saying no works.

I am guessing this is an ex LA block and they are notorious for big bills, are there still HA tenants living there?

cattie

As the flat was being sold on behalf of somebody else, it is quite possible that the relative instigating the sale had no idea whatsoever of planned works.

I thought it was pretty standard that solicitors would inquire of freeholder's/managing agents if there were any works whatsoever outstanding, planned or likely to happen over the next 5 years.

I don't think I'd be too happy with my solicitor basically washing her hands of things as yours has & trying to push you onto somebody else in the practice who will charge you £150 per hour.

I'm not sure if these people can advise https://www.lease-advice.org
It's a government funded agency set up to help leaseholder's.

Also I think I'd be looking into seeing if I could make an official complaint against the solicitor. A £23k bill landing in your lap unexpectedly is absolutely shocking & people pay solicitors to avoid such happenings as this when buying a flat.

37eeyore

If the big bills had come further down the line, that would just be hard luck and one of the risks of buying leasehold. We asked the question and were given the wrong information. This means my son could potentially lose his home. It is a block of 10 flats. 7 are still HA and 3 are private. I of the private flats is rented out.

Lord_Baltimore

I hope the £23k is all they've got planned...

Councils can be vague about what's in the pipeline unless you tie them down.