Buyers solicitor has a prob with our lease.

cuthbert_the_octopus

Dear All,

I am hoping that someone can offer us some advise, please.

We accepted an offer on our flat some months ago, and it has come down to the solicitor not being happy about the relationship between the Residents Association and the freeholder. He has put it to the bank and they have said no, they are not prepared to lend the money to our buyer for the flat, and that indemnity insurance is out of the question.

This problem has arisen due to the buyers solicitor (we are in a block of 12, an average of 1-2 are bought and sold every year and no one has experienced these problems before). He isnt happy about the arrangements for collection of service charge and maintenance etc etc. The lease states that it is the responsibility of the freeholder to maintain the building, but it actively encourages the formation of a Residents Assocation. There is a constitution between the RA and freeholders allowing the RA to look after day to day spend (<£1000) and collect the service charges. In the past this has always satisfied solicitors and sales have gone through without a hitch.

We feel the problem has been exacerbated due to our solicitor and that of the buyer working for the same firm.

I have finally accepted that this is the end for us with this buyer, is there any way around this, and the sale can still go through?

As the bank has refused to lend the money, are there any repercussions for us?

Or are we better off cutting our losses, putting the flat back on the market and waiting for the next buyer to come along (this has already taken 4-5months, and we know realise, that we would no longer be able to achieve the same price we asked for in June/July)?

Our solicitor is still on about a Deed of Variation, but to me this sounds expensive and unnecessary to me (as if we are lucky it wont be needed for the next buyer that comes along).

Any suggestions / ideas / thoughts are very welcome...... cos I really like the house we were going to buy :-(

Many thanks,
Cuthby

Debt_Free_Chick

You say there is a constitution between the RA and the Freeholders ..... but no contractual relationship between the RA and the leaseholders ....?

This might be the sticking point - that the RA is carrying our work that the FH is contractually bound to do, under the terms of the lease with the LH. In good times, there's unlikely to be a problem, but if there's a dispute between the RA and the FH, what contractual rights do the LHs have?

Perhaps this is what the Deed is intended to do - to make the RA contractually responsible directly the LH

I'm just "thinking out loud" based on what you've said - but your solicitor should really explain all of this to you. Only then will know whether it's likely to be a sticking point with future buyers.

Richard_Webster

Unfortunately it is difficult to really go into this any deeper without seeing all the documents and you will just have to rely on your solicitor to explain the nature of the issue.

If the landlord effectively delegates the responsibility for maintenance to the residents' association that may be OK because they are only acting as his agents. However there can be other variations where the residents association is actually do the work of a struck off management company that has definite responsibilities under the lease.

There are always dangers in using the same solicitor as the buyer or seller as they either skimp thing or perhaps bend over backwards to be seen to be independent!

Debt_Free_Chick

Richard_Webster wrote: »

If the landlord effectively delegates the responsibility for maintenance to the residents' association that may be OK because they are only acting as his agents.

The potential for a nice little conflict of interest too as the RA is a supplier to the FH, who in turn is a supplier to the RA, as individual leaseholders.

I can see a situation where the RA wants to do work to a certain standard, to their benefit, which is actually beyond what the FH is required and prepared to do. :rolleyes: