Selling a flat with no maintenance arangement

ginger_chocolate

Sorry, I've been lurking for a little while, and not seen this precise problem addressed. This is gong to be a long first post!

My partner and I want to sell our flat and buy a house. In many ways we’re in a great position: there’s around £100 000 equity in the flat, what little that remains of the mortgage is our only debt, and we both have secure jobs wth reasonable salaries. The flat itself is in a great location and the inside is in good condition.

The problem is that the flat is one in a block of six, and the building has no maintenance company to speak of. There is a management company to whom we pay ground rent, and who act as agents to the freeholders, but they don’t carry out any maintenance at all. The deeds state that the maintenance of communal areas is the collective responsibility of the individual flat owners. The problem is that this doesn’t work in practice. Occasionally someone changes a light bulb, does some cleaning, or pays and attempts to collect money for the communal electricity bill, but there are bigger jobs – such as the repair of badly worn wooden exteriors or the broken intercom system – which can’t realistically be done or paid for by individuals, so they just get left. After many years of this state of affairs, the exterior of the building is now quite off-putting and will only get worse with time.

We have spoken to two mortgage brokers, who were shocked to find out that we don’t pay any service charges, and flagged up that the lack of maintenance contract was likely to be a problem when trying to sell. We’ve also spoken to estate agents, who were very enthusiastic about the flat until they found out about this maintenance issue – and then rapidly backed off.

The problem is no-one seems to have any advice on what we should do, or even who we should speak to about what to do. The general advice is that “You need to get together with the other flat owners and organise or set up your own maintenance company” – but frankly, this just isn’t going to happen. Out of the five other owners, two have made it abundantly clear that they are not interested and don’t want to discuss the matter any further (they also refuse to pay their share of the communal electricity bill, and we believe don’t pay their ground rent), one other is uncontactable (I think out of the country), and two have shown a vague interest but discussions always seem to stall before we get anywhere. Despite the fact that resolving this would clearly be in everyone’s interests, for whatever reason, we just can’t get people on board.

We do pay buildings insurance – which covered a replacement door for the building when we had a recent break-in attempt. However, we recently contacted them about the damage to the wooden exteriors and were told this is classed as “wear and tear” and not covered by insurance.

It seems that we can’t do anything – we’ve been told that without a maintenance arrangement in place it is likely solicitors will advise any potential buyer to walk away, but we can’t seem to put anything in place.

We’ve been planning to move for coming on five years now but it feels like we’re stuck here forever! We would be willing to knock down the price of the flat in order to sell it, but we really don’t want to sell at a loss if it ca be helped.

Has anyone else been in this situation? How did you resolve it? Any ideas on who we can even talk to about this to get some advice beyond what we’ve already tried?

flashg67

Seems odd that it was originally set up this way. Have you checked all the deeds etc? We have communal areas and the developer set up a Ltd Co - all neighbours are shareholders and have to pay their share, even though we now self manage (it's in the deeds when the properties were/are sold/resold.
There are some who refuse to pay, but are only building up a debt for when they come to sell.
A property solicitor might be a good start.

dannim12345

Can't advise on the lack of maintenance charge/company but if you are really keen to sell maybe put it up for auction with a reverse.

enthusiasticsaver

Is there nothing in the lease about maintenance or service charges? What does the freeholder say?

I own a flat in a communal block and we all have a share in a management company which owns the freehold, we each own one share. We appoint an agent to sort out maintenance but all this is set out in a lease. I can't believe your solicitor did not point out your situation is very unusual for a leasehold flat when you bought it and the pitfalls. The whole building could be allowed to disintegrate into disrepair.

ginger_chocolate

Thanks everyone. The deeds say that the maintenance of communal areas is the collective responsibilty of the flat owners. Nothing about service charges. We have contacted the freeholder (via their agent) but it's like getting blood out of a stone - heard nothing back yet. Everyone I speak to about this says how odd the situation is - but nevertheless, that is how it is. As far as we remember, the solicitors did not flag it up as a problem at the time of purchase. I do feel like the freeholder must have some legal responsibility at least from a health and safety point of view, regardless of what the deeds say - but maybe I'm wrong?

eddddy

ginger_chocolate wrote: »

I do feel like the freeholder must have some legal responsibility at least from a health and safety point of view, regardless of what the deeds say - but maybe I'm wrong?

That's unlikely. If the lease says that the leaseholders are jointly responsible for maintenance, it would be the leaseholders that jointly have any liability for negligence etc.


a) In the lease, do the leaseholders 'covenant' to jointly maintain the common parts?

b) Does the lease contain any kind of 'Mutual Enforceable Clause'? i.e. A leaseholder can require the freeholder to enforce 'covenants' on other leaseholders?

If the answer to a and b are both yes, you can 'force' the freeholder to 'force' the leaseholders to do some maintenance work.

(That might help you in the short term, but perhaps does not help the selling situation.)

ginger_chocolate

There is nothing about a covenant in the lease. It simply says each flat owner is collectively responsible for the maintenance of communal areas and agrees to take on one sixth of the cost of any repairs (which is fine when we're talking a lick of paint in the corridors, not so much if the roof caves in...) We have just arranged to speak with a property solicitor who - again - expressed surprise at the situation, but hopefully will be able to give us some idea of the way forward. It is troubling that essentially the building could eventually fall into an uninhabitable state and there will be no-one willing or able to do anything about it. I have spoken recently with an independent block maintenance company who have said that we could potentially set something up without all of the leaseholders fully on board as long as at least half are, but they also said that we would need the freeholder's permission to do so.

eddddy

ginger_chocolate wrote: »

It simply says each flat owner is collectively responsible for the maintenance of communal areas and agrees to take on one sixth of the cost of any repairs (which is fine when we're talking a lick of paint in the corridors, not so much if the roof caves in...)

You'd have a similar issue with any lease. If the roof caves in, the leaseholders each have to pay their percentage share of cost of repairs.

But the difference with most leases is that they 'nominate' the freeholder as the person to administer it (i.e. collect the money, arrange the repairs etc).

You have to administer it jointly as a 'committee' of 6 people - and 2 members of the committee aren't interested.


FWIW, this is the same problem that some people have a with a 'share of freehold' e.g. The 6 leaseholders jointly own the freehold - but when the roof falls in, 2 people aren't interested and refuse to pay their share.

xylophone

Occasionally someone changes a light bulb, does some cleaning, or pays and attempts to collect money for the communal electricity bill,

To whom is this bill addressed?

ginger_chocolate

xylophone wrote: »

[/B]

To whom is this bill addressed?

To The Occupiers

ginger_chocolate

this is the same problem that some people have a with a 'share of freehold' e.g. The 6 leaseholders jointly own the freehold - but when the roof falls in, 2 people aren't interested and refuse to pay their share.

I would really like to know about other block of flats in this situation - seeing as we can't be the only people thos has ever happened to. I imagine that if something as serious as the roof falling in were to happen, somebody would need to do something about it. But how does that work if people who are 'responsible' can't or won't pay?