Freeholders not revealing service charge/ground rent

Ogriv

Hello all
I'm a FTB looking to buy a one-bed flat. It will more than likely be leasehold.
An issue I'm coming across is the problem of vendors (usually freeholders) not revealing what the ground rent and service charges are likely to be.
This is often the case when the unit is newly developed or it has been previously rented out to tenants.
I don't want to get embroiled in a sale and then have to pull out cos these charges are extortionate.
Am I being paranoid? At the moment it is enough to put me off making an offer on places.

[Deleted User]

Would you make any purchase if you didnt know the costs ? No you wouldnt

You - I'd like to book a holiday to America, 4 weeks full board how much is that please

Agent - well I don't know until you get there !

Anyone selling anything will know likely costs and if they aren't divulging any information its obviosuly not a good selling point.

This is the biggest purchase you are going to make so go in with your eyes open. If you get it wrong or are badly advised it could be the most costliest mistake you ever make.

cattie

You mention that it's usually freeholders selling the flats & this is not rule of thumb. Yes if it's a new flat being sold by developer they could be the freeholder, but in the case of a previously owned property, the great majority of flat sales will be by leaseholders.

A leaseholder should definitely be able to tell you what they are currently paying in service charges, length of lease etc. so yes, be wary of any flat leaseholder who is unwilling to divulge these important details. Never take what an ea tells you about these details as gospel as they don't get to see the lease or have access to documents relating to service charges etc. & sometimes a leaseholder will give false info to them regarding service charges & lease length to make the flat sound more appealing as a purchase.

divadee

Never trust the estate agents. We own the freehold to our converted house of 4 flats. The one downstairs has just been repossessed and I overheard the estate agents telling the prospective buyers it has a long lease. Hhmmmmmm. Well the same agent asked us how long was left on the leases when it was put on with them and we told her categorically that it has 63 years left. We knew exactly as we had just bought the freehold.

If they are unwilling to tell you service charges walk away. Most people will have a rough idea even if it's "last year cost £1000"

Ogriv

Yes, thanks guys, I think you're right. No matter who it is, if they are unwilling to reveal such basic info; or in the case of a new freeholder, the rough amount they are intending to charge, then I don't think it's worth my while continuing.

How on earth can a buyer do any costings? There are quite a few of these cheeky sods out there.

Typhoon2000

Don't believe anything the seller or the EA tells you anyway when basing your decision, they are invariable wrong or missing the full picture. Your solicitor will be able to give you the exact figures

Ogriv

So this morning I messaged the vendor/freeholder of one of these places via Purplebricks asking about these charges.
The Purplebricks EA who had showed me around said they "hadn't decided yet". I'll give the seller the chance to reply to me by Saturday, but if they don't, I will cancel the second viewing I had scheduled. Watch this space.

martindow

Ogriv wrote: »

The Purplebricks EA who had showed me around said they "hadn't decided yet".

Hadn't decided what? That's a bizarre reply if you've asked what the ground rent and service charges are.

deFoix

EA scum.

Unfortunately there are enough carefree buyers out there who don't ask these basic yet vital questions that the EAs don't care to bother.

I would like to see a law in force that makes it mandatory for EAs to provide detailed information on service charges, ground rent, lease term and any other thing that would materially effect the price of the property clearly stated in the advertising literature.

Ogriv

Basically when you ask the EA what the service charges and ground rent are, they indicate that the developer (usually a small-time one) or the freeholder (has kept the units tenanted previously, now selling them as leasehold) "hasn't decided yet". This is because as leasehold flats these are new to the market. I have heard this more than once in the last two months. However, even though these are new to the market as leaseholds, I feel it's most impolite to not offer even a ballpark figure. They are clearly banking on someone very naive to come along.

katejo

I agree that the EA (and the seller?) should have this info and be responsible for accuracy. I have put this argument before and been told that the seller may not know (particularly if selling a parent's property). However it should surely be a legal requirement to provide this info? If a seller doesn't know, they can contact the Land Registry/the Management company/the Freeholder to find out. If I were buying a leasehold, I would check it with the Land Registry and ask for proof of service charges from the current leaseholder before making any offer.