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Section 20s - A Cautionary Tale
Spriggan
Posts: 43 Forumite
Hi all,
I had a recent experience that I wanted to share, in case it helps anyone else avoid the same issue.
We were buying a flat in a small block that was part of a larger council estate. The council were the freeholder. In the many bundles of paperwork that came through were several bits and pieces from the council relating to service charges etc. One bit related to current or upcoming section 20 works - of which there were none. It also specifically stated that there were no works being planned in the near future. Great!
I assumed that it wouldn't be possible for them to lie - or, at the least, withhold information - in this kind of document. As it turned out, they were weeks away from sending section 20s out to most of the flats on the estate. And not small ones.
Luckily for us, one came through before exchange. It prompted us to look more closely into it, and through some extensive googling found out that it was just the start of a major redevelopment plan for the estate, likely to cost a staggering amount - more than our deposit.
Ultimately, it would have been on us for not digging into it. We're FTBs so a lot of this stuff is unknown to us. But the fact that they gave us information that was so unashamedly untrue did come as a bit of a shock. I come away from this experience feeling wiser and more suspicious!
To anyone looking into buying a council place, I'd say - google the estate, talk to the neighbours, find out if there is a residents' association. Ask the council for any recent condition reports that have been done, as these might suggest that the place is in need of repair. Check whether major works have been done in the last 10 years - if not, then they may be overdue. When were the pipes last done? The roof? Get a structural survey done. Read and understand your lease! What would you be required to chip in for? Is there a sinking fund? If not, you could be on the line for many years - possibly decades - worth of remedial work that general maintenance charges won't cover.
There's always going to be a risk that works are upcoming. But do what you can to find out the likelihood of them being imminent, and of what scale.
As a homeowner, you have very little power in objecting to a section 20. The chances are the work will be needed and you will need to contribute to the bill. Many councils are now bringing their housing up to meet standards. Make sure you do you homework and take into account the risks that may come with a ex-council property.
I had a recent experience that I wanted to share, in case it helps anyone else avoid the same issue.
We were buying a flat in a small block that was part of a larger council estate. The council were the freeholder. In the many bundles of paperwork that came through were several bits and pieces from the council relating to service charges etc. One bit related to current or upcoming section 20 works - of which there were none. It also specifically stated that there were no works being planned in the near future. Great!
I assumed that it wouldn't be possible for them to lie - or, at the least, withhold information - in this kind of document. As it turned out, they were weeks away from sending section 20s out to most of the flats on the estate. And not small ones.
Luckily for us, one came through before exchange. It prompted us to look more closely into it, and through some extensive googling found out that it was just the start of a major redevelopment plan for the estate, likely to cost a staggering amount - more than our deposit.
Ultimately, it would have been on us for not digging into it. We're FTBs so a lot of this stuff is unknown to us. But the fact that they gave us information that was so unashamedly untrue did come as a bit of a shock. I come away from this experience feeling wiser and more suspicious!
To anyone looking into buying a council place, I'd say - google the estate, talk to the neighbours, find out if there is a residents' association. Ask the council for any recent condition reports that have been done, as these might suggest that the place is in need of repair. Check whether major works have been done in the last 10 years - if not, then they may be overdue. When were the pipes last done? The roof? Get a structural survey done. Read and understand your lease! What would you be required to chip in for? Is there a sinking fund? If not, you could be on the line for many years - possibly decades - worth of remedial work that general maintenance charges won't cover.
There's always going to be a risk that works are upcoming. But do what you can to find out the likelihood of them being imminent, and of what scale.
As a homeowner, you have very little power in objecting to a section 20. The chances are the work will be needed and you will need to contribute to the bill. Many councils are now bringing their housing up to meet standards. Make sure you do you homework and take into account the risks that may come with a ex-council property.
0
Comments
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Good advice, and well done for dodging the bullet.
Personally, I'd never again have the council as my freeholder. Whether the works are genuinely needed, or good value for money, appear not to be strong factors in decision making when spending a combination of public funds and leaseholders' money.take into account the risks that may come with a ex-council property.0
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