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Buying a council freehold flat with subsidence
lm4868
Posts: 4 Newbie
Hello,
I have recently had an offer accepted on a flat in Brixton. It’s a leasehold flat and the freeholder is Lambeth Council. My would-be flat is on the first floor, and there are two other flats in the building. I had a homebuyers report completed last week on the property, and the surveyor noticed some subsidence on the external wall of the property, affecting both first and ground floor flats. He has advised that I get a structural surveyor to assess the cause of the subsidence, and that I act with caution as this could sting me when it comes to re-sale.
Naturally, I raised this with the estate agent who is giving the usual spiel of “it’s a Victorian building, it’s never going to be perfect etc.” I have said though that I do not want to continue with the purchase until a structural engineer comes to review the issue, so as a result the vendor has organised this for tomorrow.
In the meantime, I decided to call Lambeth council to understand what the process is when repairs are needed. The representative explained that, as the freeholder, the council was responsible for the upkeep of the external walls etc and all I needed to do was get the vendor to contact the council and report the subsidence, and they will arrange for a surveyor to come and assess the situation and repair the building. He made it sound very simple and did not mention any cost borne to the leaseholders which made me suspicious. Surely they don’t have oodles of cash lying around to fix subsidence issues on every Victorian building in the borough?!
On the Lambeth gov.uk website they clearly state that for repairs, the leaseholders must pay a portion of the cost of the works:
“Under the lease, you must pay a share of our expenses in repairing, maintaining and renewing these items.”
A few questions
1. How can I get the best idea of what this would cost should I wish to try and renegotiate the purchase price? (My solicitor is still waiting for the lease from the vendor’s solicitor so we are still unclear as to what my share of contribution would be for repairs).
2. Presumably the cost of the works is divided between all leaseholders, but don’t they all have to agree to pay for the works? If I were to report it to the council and they do indeed find that it needs to be repaired, do the other leaseholders have a right to refuse to pay?
3. Isn’t this sort of work covered by the buildings insurance that the leaseholders have been paying all these years?
4. How would I be charged for the works? Would it come through in my service charge or a separate bill?
I really like the flat and am very keen to press on but only with the security of knowing that I won’t be lumped with a massive bill once I move in.
Has anyone else experienced this before? Any advice greatly appreciated.
Thanks
I have recently had an offer accepted on a flat in Brixton. It’s a leasehold flat and the freeholder is Lambeth Council. My would-be flat is on the first floor, and there are two other flats in the building. I had a homebuyers report completed last week on the property, and the surveyor noticed some subsidence on the external wall of the property, affecting both first and ground floor flats. He has advised that I get a structural surveyor to assess the cause of the subsidence, and that I act with caution as this could sting me when it comes to re-sale.
Naturally, I raised this with the estate agent who is giving the usual spiel of “it’s a Victorian building, it’s never going to be perfect etc.” I have said though that I do not want to continue with the purchase until a structural engineer comes to review the issue, so as a result the vendor has organised this for tomorrow.
In the meantime, I decided to call Lambeth council to understand what the process is when repairs are needed. The representative explained that, as the freeholder, the council was responsible for the upkeep of the external walls etc and all I needed to do was get the vendor to contact the council and report the subsidence, and they will arrange for a surveyor to come and assess the situation and repair the building. He made it sound very simple and did not mention any cost borne to the leaseholders which made me suspicious. Surely they don’t have oodles of cash lying around to fix subsidence issues on every Victorian building in the borough?!
On the Lambeth gov.uk website they clearly state that for repairs, the leaseholders must pay a portion of the cost of the works:
“Under the lease, you must pay a share of our expenses in repairing, maintaining and renewing these items.”
A few questions
1. How can I get the best idea of what this would cost should I wish to try and renegotiate the purchase price? (My solicitor is still waiting for the lease from the vendor’s solicitor so we are still unclear as to what my share of contribution would be for repairs).
2. Presumably the cost of the works is divided between all leaseholders, but don’t they all have to agree to pay for the works? If I were to report it to the council and they do indeed find that it needs to be repaired, do the other leaseholders have a right to refuse to pay?
3. Isn’t this sort of work covered by the buildings insurance that the leaseholders have been paying all these years?
4. How would I be charged for the works? Would it come through in my service charge or a separate bill?
I really like the flat and am very keen to press on but only with the security of knowing that I won’t be lumped with a massive bill once I move in.
Has anyone else experienced this before? Any advice greatly appreciated.
Thanks
0
Comments
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Don't walk away. RUN.
Although I rather suspect your mortgage lender will make that decision for you...
The cost of maintenance and repair work to any shared building will always be apportioned to the leaseholders. Why wouldn't it?
Subsidence on a block is never, ever going to be cheap.
Flats where the freeholder is the council are notorious for high service charges and for high s20 bills.
You ARE going to be "lumped with" a large bill. So the question, if you insist on going ahead and can finance it, is more one of whether the flat is cheap enough to buy for that likely bill to have been taken into account in the purchase price...0 -
Thanks for your reply.
What’s odd is that the mortgage valuation was fine - which either makes me think they didn’t notice it at all or didn’t think it was an issue.0 -
Assume that mortgage valuers are human and thus fallible like anyone else, then run. Sure, it might never turn out to be an issue, but if it does, this is the kind of thing that can be life-ruiningly expensive and you'll have no way out - once the cost is known, you're legally obligated to pay it unless you sell the flat, which at that point will be impossible.0
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Thanks for your reply.
What’s odd is that the mortgage valuation was fine - which either makes me think they didn’t notice it at all or didn’t think it was an issue.
It is a valuation, not a survey. They merely check that if you were to default the value of the property would pay off the mortgage. In many cases they do that by driving past the property, they don't even get out of the car to go inspect it.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Did you have any kind of survey, or just a valuation? Did they look at the block itself, or just the flat?0
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I have said though that I do not want to continue with the purchase until a structural engineer comes to review the issue, so as a result the vendor has organised this for tomorrow.
Have you organised the structural engineer or the vendor. ? Hopefully not the latter.Never pay on an estimated bill. Always read and understand your bill0 -
The lender sent someone out for a valuation survey, and then I had an independent homebuyers report done, and now the vendor has arranged for a structural engineer to come and look at it tomorrow.0
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The latter. I have insisted that the whole report is shared with me, and I’ve been given the name of the company they’re using so can check back0
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Council is the freeholder? Await some large bills in the future then.
I knew of one person who owned a 2 bed flat in a tower block. New roof and new windows. £29K!
I looked at an auction property not knowing it was ex council. 2 Bed flat in a block of 4. Legal pack of course disclosed the freeholder along with the flat it was getting new windows in 2 years time. 4 windows. £4200.
All you need to know was told in the first reply.Don't walk away. RUN.
Thats the best advice you'll get on this one0 -
I guess that this flat looked "good value for money?" It was probably bigger and in a nicer area than you thought you could afford. This flat is not good value for money and it is not cheaper than a flat in the same area in good condition because the cost of the repairs and the bill for those that you are going to get from the council will be much much more than buying one in good condition.
The reason why it appears good value for money is because there is something seriously wrong with it. What is wrong with it is the subsidence. You can guarantee that if a property looks cheap for where it is then there is something wrong with it that is going to cost more to repair than you could get back if you sold it.
This flat is not cheap or good value for money. You are going to get a large bill for the repairs to the subsidence. Not only that but you are going to get large bills for anything that needs to be repaired. Generally it is a very bad idea to buy an ex council flat because of the possibilities of large bills. This one though promises large bills from the start and it won't £100s it will be £1000s. Unless you don't mind spending more money on this flat than you can sell it for don't buy it. Look for something else where the block is in better condition.
If you can't afford to get a structural survey on it you can't afford to buy it.0
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