MAJOR Remedial works leaves my property unsellable

joatmonnix

Hi,
I'm looking for some advice please. Apologies for the very long post but there is not a quick way to describe the situation!

We live in a leashold flat that I purchased directly from the developer 10 years ago. In 2014 water ingress was noted as a serious issue in the development as well as water penetration into some apartments. This was the start of a number of serious defects (including inadequate fire safety - we have 24 hour fire warden patrols on site now), incorrect use and installation of building materials, render staining and much more. The developer has admitted full responsbility and agreed to undertake remedial works to the development at their (or their insurers) cost. There are three blocks and the remedial works are being undertaken in 3 phases. The work being undertaken involved removing all external brick and blockwork and effectively rebuilding the exterior of the property amongst other things. The first block is now complete (it took 2 years) and they are now working on the middle block where my apartment is located. The work on my block started in August 2018 and is due for completion in January 2020. Completion of the whole development will take in total around 6 years. Throughout this period there will be scaffolding on the property with builders working outside our windows from 730am to 5pm daily. Access to our balcony has been blocked off and we cannot open any external windows or doors. The noise is unbearable throughout the working periods and because of privacy (the builders are literally standing outside all our windows) we have our blinds closed 24/7. Our communal grounds now have a works compound installed and we have heavy machinery being driven around daily. As the main contractor has stated to us, we are living in a building site.
I have wanted to sell my flat for the past 2 years however I have put this on hold because I was waiting to receive an accurate works scehdule. I was also concerned about the loss of value to my apartment because of the works. The developer has admitted that we would not receive full market value if we wanted to sell now (which we do) so it is up to us to decide if we want to take that hit or not. I have also recently spoken to a mortgate surveyor and valuer who has stated that no lender would accept the length of time for the ongoing works and would therefore not lend to a purchaser so my property is also not mortgageable. Add to this that I can't see how anyone would want to purchase a property anyway where you can't open any windows and have to put up with full building works every day amongst other problems.
The developer has offered compensation, although this is an incredibly small amount considering the disruption caused and is something that I do not want to accept. They have also stated that if we accept the compensation we cannot disclose what has happened to anyone. The developer has also stated that this compensation is the final and only offer they will make. They will not purchase our property from us (we have asked) and they will not take into account any individual circumstances - be it those who want to sell and can't, landlords who have to accept a reduced rental income because of the works, or any other factors. Their offer of compensation is final.
I am finding it difficult to decide whether we should go down our own legal route or whether we should accept their offer of compensation (it is not enough in my opinion). It is not the compensation that I am mostly concerned about, it is the fact that we are currently trapped in an unsellable apartment and we cannot move on with our lives. If we sell (but a purchaser would have to be a cash buyer I presume) below it's market value I will be losing equity in the property that I need. If we choose to rent it out I will also be receiving below market value in rent. We are therefore trapped here and both of these scenarios are not being covered by the developer.

To summarise:
- We live on a building site because of the remedial works having to be undertaken by the developer. The noise, dust, lack of privacy and disturbance is extremely stressful.
- We cannot open and external windows or doors or access our balcony for 65 weeks.
- We cannot sell the property because it is not mortgageable. Even if we put it on the market we would not achieve its market value.

I have been advised that there really is nothing we can do because the developer has agreed to fix the problems (even if it takes 6 years). The fact that my asset which I paid a large sum of money for has decreased in value through no fault of my own is not a factor. The fact that I cannot sell my property at market value (even though I want to) is not a factor. The developer has offered compensation so that is the end of it.

Can anyone give me some guidance? Has anyone been in this scenario before? Is it worth going down my own legal path which would cost thousands and may end up with a lesser offer than the original compensation offer? Any other advice or guidance would be much appreciated.

Thanks in advance!

quantumlobster

joatmonnix wrote: »

Hi,
I'm looking for some advice please. Apologies for the very long post but there is not a quick way to describe the situation!

We live in a leashold flat that I purchased directly from the developer 10 years ago. In 2014 water ingress was noted as a serious issue in the development as well as water penetration into some apartments. This was the start of a number of serious defects (including inadequate fire safety - we have 24 hour fire warden patrols on site now), incorrect use and installation of building materials, render staining and much more. The developer has admitted full responsbility and agreed to undertake remedial works to the development at their (or their insurers) cost. There are three blocks and the remedial works are being undertaken in 3 phases. The work being undertaken involved removing all external brick and blockwork and effectively rebuilding the exterior of the property amongst other things. The first block is now complete (it took 2 years) and they are now working on the middle block where my apartment is located. The work on my block started in August 2018 and is due for completion in January 2020. Completion of the whole development will take in total around 6 years. Throughout this period there will be scaffolding on the property with builders working outside our windows from 730am to 5pm daily. Access to our balcony has been blocked off and we cannot open any external windows or doors. The noise is unbearable throughout the working periods and because of privacy (the builders are literally standing outside all our windows) we have our blinds closed 24/7. Our communal grounds now have a works compound installed and we have heavy machinery being driven around daily. As the main contractor has stated to us, we are living in a building site.
I have wanted to sell my flat for the past 2 years however I have put this on hold because I was waiting to receive an accurate works scehdule. I was also concerned about the loss of value to my apartment because of the works. The developer has admitted that we would not receive full market value if we wanted to sell now (which we do) so it is up to us to decide if we want to take that hit or not. I have also recently spoken to a mortgate surveyor and valuer who has stated that no lender would accept the length of time for the ongoing works and would therefore not lend to a purchaser so my property is also not mortgageable. Add to this that I can't see how anyone would want to purchase a property anyway where you can't open any windows and have to put up with full building works every day amongst other problems.
The developer has offered compensation, although this is an incredibly small amount considering the disruption caused and is something that I do not want to accept. They have also stated that if we accept the compensation we cannot disclose what has happened to anyone. The developer has also stated that this compensation is the final and only offer they will make. They will not purchase our property from us (we have asked) and they will not take into account any individual circumstances - be it those who want to sell and can't, landlords who have to accept a reduced rental income because of the works, or any other factors. Their offer of compensation is final.
I am finding it difficult to decide whether we should go down our own legal route or whether we should accept their offer of compensation (it is not enough in my opinion). It is not the compensation that I am mostly concerned about, it is the fact that we are currently trapped in an unsellable apartment and we cannot move on with our lives. If we sell (but a purchaser would have to be a cash buyer I presume) below it's market value I will be losing equity in the property that I need. If we choose to rent it out I will also be receiving below market value in rent. We are therefore trapped here and both of these scenarios are not being covered by the developer.

To summarise:
- We live on a building site because of the remedial works having to be undertaken by the developer. The noise, dust, lack of privacy and disturbance is extremely stressful.
- We cannot open and external windows or doors or access our balcony for 65 weeks.
- We cannot sell the property because it is not mortgageable. Even if we put it on the market we would not achieve its market value.

I have been advised that there really is nothing we can do because the developer has agreed to fix the problems (even if it takes 6 years). The fact that my asset which I paid a large sum of money for has decreased in value through no fault of my own is not a factor. The fact that I cannot sell my property at market value (even though I want to) is not a factor. The developer has offered compensation so that is the end of it.

Can anyone give me some guidance? Has anyone been in this scenario before? Is it worth going down my own legal path which would cost thousands and may end up with a lesser offer than the original compensation offer? Any other advice or guidance would be much appreciated.

Thanks in advance!

First up: there's no such thing as unsellable. Literally. The price might not be you want, but it could be falling down, on fire, underwater, and covered in poo, all at the same time, and someone will buy it at the right price.

Also, as you observe, not everyone needs a mortgage; cash buyers don't have to care one whit about the foibles of a lender.

Not really sure what you expect, tbh. Serious problems receive serious solutions, and things take time. A year and a bit is a long time but then as you describe, there's a huge amount to do. And you're not paying for any of it. You've been offered compensation. It's not what you wanted - how far short of what you'd accept is it? If they've offered £500 and a half-price curry, then that's one thing. But if they've offered £tens of K, then that's something else.

In your position I'd be having my free half-hour (if that's still a thing) with a solicitor to see if they think you've got a leg to stand on.

diggingdude

Personally i think you should be thanking the heavens that the developer is doing the work and admitting liability as many leaseholders seem to have lost everything since Grenfell due to development costs if what i read in the news is accurate. Its annoying but with the facts known you would have got a lot less for your flat if the leaseholder was going to have to pay for the work

joatmonnix

Thanks for both your comments. I am sure there are leaseholders in far more unfortunate circumstances and I am indeed thankful that the remedial work is being undertaken by the developer - albeit after very lengthy discussions with our residents association. I am only speaking from my personal circumstances and find it amazing that a developer can essentially sell you a faulty product (they knew about water ingress in 2008), devalue your property by thousands of pounds and turn your property into a building site as long as they remedy their faults - even if it takes 6 years. Then effectively make you sign a non disclosure agreement in order to accept the compensation offer.
There are worse situations, but speaking for myself I find the fact they can get away with this a very sad state of affairs.

diggingdude

Just incase it didn't come across earlier, I want you to know I do sympathize with you. It's a nightmare what's happened with builders cutting corners at times