Section 20 works on a leasehold. HELP!

MD8

Hi all,

I am a first time buyer purchasing a leasehold flat and my solicitor has just flagged that S20 works are being carried out and scheduled on the building over the next 6 years! This is pretty extensive and covers windows, roof, guttering, paving etc.

I am buying just towards the end of year 2 of the 6, will i be liable to pay the fee for the 2nd year? Does anyone know how this usually works with work scheduled over a long period? I'm worried i will be hit with a big bill!

Thanks!

HampshireH

It sounds like you will be.

Have you asked for a breakdown of proposed costs and works per year?

eddddy

MD8 wrote: »

I am buying just towards the end of year 2 of the 6, will i be liable to pay the fee for the 2nd year?

It's not possible to guess the payment structure.

It may be that the whole cost was paid by leaseholders up-front (so it's all been paid for already).

It may be that it's paid in installments - perhaps yearly.

It may be that the leaseholders will be billed for the whole cost once the whole job is finished.

So you need to find out what's already been paid for, and what still needs to be paid for.

Then you may need to negotiate. e.g. If there is still £5k that needs to be paid - you have to decide if you want to reduce your offer by £5k.

[Deleted User]

Yes, 2 separate issues: how does the freeholder time the invoices and payments; and how do you and the vendor agree to split it.

You need to get both in writing via your solicitor (not the EA!)

If the final bills aren't yet known, one option is for your solicitor to retain part of your payment, and pass on the relevant left-over once the final bill is in. Or you may agree to take a fixed amount off the price, but bear the risk that the final bill could be larger.
I did the former for the service charge, but the latter for section 20 works. I think that was reasonable, since the service charges were finalised within a reasonable time frame, but the section 20 wasn't invoiced for 2 years, and obviously the vendor didn't want to wait that long for their money.

It is all down to the negotiations between you and vendor.