Issues raised in survey for communal area flat

Mark14

Hi,

I recently had a homebuyer report carried out on a flat in a converted pub I am looking to buy (I haven't exchanged contracts yet)and whilst there are no major issues to the flat, the building itself has a range of issues that need doing including walls, roof and chimney.

I am assuming these cost will be shared between the leaseholders but I am wondering if this can be used to renegotiation on my offer as these were issues I didn't foresee and the work is likely to be costly. My accepted offer is what I was willing to pay with the building having no major issues.

If you could let me know what you think that would great.

Mark

marksoton

You can negotiate.Whether the vendor goes for it is another matter.

If they don't i'd walk away. Knowing there's expensive maintenance from day one is not a good start on a leasehold.

dc197

The phrase you used sounds like the perfect opening line for a negotiation: "My accepted offer is what I was willing to pay with the building having no major issues."
Good luck.

stator

Definitely something to look into further. Is the management company active? Are they maintaining the building at all? Is there a sink fund for large costs?

It's definitely something to negotiate on, but they may just tell you to take it or leave it.

Irratus_Rusticus

Two sided issue. As others say, you can see there is likely to be expensive shared costs under the lease's service charges and it would be ill-advised to assume a freeholder/agents will get the work done at competitive prices so how do you price that in advance to negotiate a likely share of the cost ? If I was advising the buyer in such scenario I'd say no deal.

On the other hand, the seller is presumably paying the service charge demanded by the landlord/agents (you would check this obviously) and is not personally liable for all the costs of communal works if/when done even if you both could agree a figure to apportion to them. Nor are they (or you if you buy) able without legal hassle to force the landlord/agents to act unless flats share-own the freehold or form an RTM company. Significant neglect can hang around for many years. So if I was advising the seller in this case I'd say no deal.

Your survey has done its job.

StumpyPumpy

Mark14 wrote: »

...I am assuming these cost will be shared between the leaseholders...

Don't assume anything - find out. The costs probably will be shared out, but sometimes the distribution can be uneven (eg based on sqft or number of rooms) and if you don't know, your bill can come as an extra shock.

I even know of an example in a block of flats where one flat paid no service charges and was not liable for the cost of any repairs. This was because historically (they are a 1960's build), that flat was for the caretaker. In subsequent years the caretaker's services were dispensed with and the flat was sold into private hands without the lease being modified. It only came to light when significant works were planned and the distribution of the costs was one flat short.

SP

moneyistooshorttomention

StumpyPumpy wrote: »

Don't assume anything - find out. The costs probably will be shared out, but sometimes the distribution can be uneven (eg based on sqft or number of rooms) and if you don't know, your bill can come as an extra shock.

I even know of an example in a block of flats where one flat paid no service charges and was not liable for the cost of any repairs. This was because historically (they are a 1960's build), that flat was for the caretaker. In subsequent years the caretaker's services were dispensed with and the flat was sold into private hands without the lease being modified. It only came to light when significant works were planned and the distribution of the costs was one flat short.

SP

Valid point:T

OP might get lucky and have the equivalent situation to the "ex caretaker flat" of course.

Presumably - in the case of that particular block of flats - the caretakers flat was worth more than the other flats (ie because of not carrying a share of the costs) and the other flats had turned out to be worth less (ie because of having to cover part of the "caretaker flat" costs, as well as their own)??

princeofpounds

There might be a sinking fund already in place to deal with this, there might not.


It's highly likely that leaseholders will end up paying for the building repairs in some way, at some point, although as the others have said the details of the leases can change a lot.


It's definitely a liability that needs to be factored into any offer.

StumpyPumpy

moneyistooshorttomention wrote: »

Valid point:T

OP might get lucky and have the equivalent situation to the "ex caretaker flat" of course.

Presumably - in the case of that particular block of flats - the caretakers flat was worth more than the other flats (ie because of not carrying a share of the costs) and the other flats had turned out to be worth less (ie because of having to cover part of the "caretaker flat" costs, as well as their own)??

In theory, yes, but the caretaker flat has not been sold since and I assume this is why it had remained a secret.

This is all second hand information, by the way, so YMMV, but I was told that when it was revealed at an EGM of the leaseholders there was uproar, not only because of the exclusion (and we are talking of upwards of £70k per flat for the work) but the fact that the flat was bought "privately" by one of the directors of the then incumbent management company. Knowing some of the people there, I would be surprised if legal advice wasn't subsequently taken, but no action followed so I assume it was all legally, if not morally, above board.

Hearing about this made me realise that nothing can be assumed when dealing with property. Most of the time the assumptions are completely valid but if they are not then it can be a very painful (and costly) mistake to have made them.

SP

Mark14

Thanks for all the replies it has given me something to think about.

The other issue I have is I'm not sure how much all the work will cost as the surveyor didn't really mention costs when I contacted him after the survey. I am still awaiting a copy of the lease and there are 6 flats so hopefully the any costs shouldn't be too high.

moneyistooshorttomention

StumpyPumpy wrote: »

In theory, yes, but the caretaker flat has not been sold since and I assume this is why it had remained a secret.

This is all second hand information, by the way, so YMMV, but I was told that when it was revealed at an EGM of the leaseholders there was uproar, not only because of the exclusion (and we are talking of upwards of £70k per flat for the work) but the fact that the flat was bought "privately" by one of the directors of the then incumbent management company. Knowing some of the people there, I would be surprised if legal advice wasn't subsequently taken, but no action followed so I assume it was all legally, if not morally, above board.

Hearing about this made me realise that nothing can be assumed when dealing with property. Most of the time the assumptions are completely valid but if they are not then it can be a very painful (and costly) mistake to have made them.

SP

Oooh...someone taken advantage of "insider knowledge" to benefit themselves by the look of it. I know what you mean - there is a situation near me where someone seems to have done that:cool:.