Leasehold sale held up due to 'unauthorised works'

Ginger_Winner

I am hoping that someone might be able to give me some advice from a legal perspective regarding a very frustrating issue that I have...

I have a leasehold property that I am selling. The buyers solicitor's search has shown a 'contravention of building regulations' in the form of unauthorised works. So this needs to be addressed before the solicitor will advise the buyer to go ahead with the purchase.

The freehold owner is Brent Council. The works in question were part of a borough wide upgrade of their stock of property running into millions of pounds. I was invoiced for my share of these works to the tune of £12k which was for a like for like replacement of the roof.

Brent council are notoriously slow to deal with. Clearly the fault here lies with Brent as the landlord, but my immediate priority is to sell the property and I'm worried that if this drags on much longer that I may lose the sale.

My intended solution for this issue is to place £15k in escrow to indemnify the buyer in the unlikely event that this situation was to have repercussions on them. In the mean time I will pursue Brent to get this permanently resolved enabling me to free up the escrow payment.

My question is this: Specifically, how are Brent as a freehold landlord, breaching their obligations to me as a leaseholder by allowing unauthorised works to take place? I cannot see any specific point to reference in the lease, but I assume that they are breaching a legal statute. I am keen to understand what that statute would be. I am also keen to understand if I have any claim for compensation or refund of the any of the payment made for these works.

Any advise from someone with experience of a similar situation would be greatly received....

princeofpounds

The details of the breach aren't entirely clear from the description you provide, so it's hard to comment too exactly. Do you actually know what the issue is specifically about?

The issue is not statute. Presumably there has been some work done by the freeholder which did not meet building regulations and the buyer's solicitor has discovered that.

The fact that the council is both the freeholder and responsible for building regulations management is ironic, but not that important - the council can't give itself the permission to break regulations.

The key issue is that if something needs to be done to address that enforcement, the leaseholders will eventually be liable for the costs of it through the service charge. So they buyer's solicitor is advising them (he/she is responsible to both the buyer AND their mortgage lender) not to proceed.

Your offer to indemnify them with some money in escrow is worth trying. But it will need to convince all three parties (solicitor, lender and buyer) on the buying side in order to work.

Refund? Not sure... it would probably require a trip to Tribunal stating that the works were not of a reasonable standard and so not recoverable through the service charge. But presumably they will sort it out and then it will be recoverable, as will any further expenses incurred.

davidmcn

How long ago were the works done? Unless very recent and potentially a "live" issue, it's immensely unlikely that building control are going to care about any contravention. And is there actually a "contravention" in the sense of works which need to be sorted out, or just a lack of paperwork / sign-off?

I doubt it's relevant to the amount paid by leaseholders unless there is actually an objective problem with the standard of the works and further costs to be incurred to sort them out.

Doozergirl

I'd really like to know what the contravention is...  is it unsafe?  Can it be remedied?  Who flagged it, how and why within the searches? 

People do things like this all the time and an indemnity policy is usually enough to make it go away, unless the buyer is particularly jittery. 

Indemnity policy would be my first port of call, or if it's genuinely not acceptable to the mortgage company (unusual!) or buyer (less unusual) then physically sorting the problem is the best way to make it go away.  Getting legal, whilst giving the buyer carte blanche to spend money on it sounds like more stress than it's worth.  

You want to get this over the line with the least resistance possible.  

eddddy

Ginger_Winner said:

The works in question were part of a borough wide upgrade of their stock of property running into millions of pounds. 

It sounds like the buyer's solicitor is simply saying that a search hasn't turned-up building regs sign-off for the roof. So at this stage, there is no suggestion of any problems and/or non-compliance with regs for the roof.

If it was a 'borough wide upgrade', could it be that a single building regs sign off applied to the whole borough, whole estate, whole street, or whatever?

In which case, it might not show up when just your specific address is searched. A different type of search criteria might be required for 'borough wide' sign-offs etc.   The council should be able to provide details.



You might even be able to find it yourself, if you have details like dates etc: https://pa.brent.gov.uk/online-applications/search.do?action=advanced

Maybe try using application types of "Major Projects", "Brent Council Applications", "Brent Partner Applications" etc.

Ginger_Winner

Thanks for the replies - the results from the buyer's solicitor's search are below. 
I have of course raised this with Brent (via my solicitor), but they are notoriously slow at responding (query was raised on 16 Dec). I am chasing them daily along with my solicitor and estate agent.
I am not sure exactly what I should be asking Brent to do to rectify this. My request to understand the legal situation is purely to try to have some leverage with Brent if I need it.

Here is what the buyer's solicitors search came back with:

3.8 Contravention of Building Regulations
Has a local authority authorised in relation to the property any proceedings for the
contravention of any provision contained in building regulations?
Site History for this Property
BCCS are aware of the following reports and/or unauthorised building works undertaken
without the benefit of a Building Regulation submission. Investigation may lead to a
Regularisation application (refer 1.1(j-l)) or, in some instances, to formal proceedings.
Please contact BCCS for further information.

Application: Local Authority Building Control

Number: UN/17/12576

Validated:

Type: Unauthorised Works

Status: Record received

Summary:

Decided: 24/01/2018

Completed:

Record: Computerised

Description: Roof Recovering (Wates)

davidmcn

So it looks like they found about it three years ago, and nothing has happened since. Doubt anything will ever happen. Might not even be competent for any action to be taken by now.

Doozergirl

davidmcn said:

So it looks like they found about it three years ago, and nothing has happened since. Doubt anything will ever happen. Might not even be competent for any action to be taken by now.

Agreed.  But the LA know that they didn't apply for building control so no indemnity policy can be offered.   

Are the mortgage company prepared to take on the (infinitesimal) risk?  I don't think a retention is appropriate here.  

OP, you need to know your buyer's mortgage company's position here.  What you need is a letter from Building Control stating that they will not be taking action against themselves.  That is the quickest route out of this mess.  

How ridiculous.  I do feel for you.  I think at this point the LA would need to take out an injunction against themselves to enforce it.  

Ginger_Winner

My priority is to sell my flat, but the buyer will not complete the purchase with this search result.
Is my only option to indemnify the buyer? - by which I mean that I have to have a legal agreement drawn up whereby I take liability for any future costs in relation to this work?
I feel a somewhat aggrieved that I have to take a financial liability for something that should be accountable to the landlord.... but as I say, my priority is to sell the flat so if that is the only way forward then so be it.

Ginger_Winner

Doozergirl said:

davidmcn said:

So it looks like they found about it three years ago, and nothing has happened since. Doubt anything will ever happen. Might not even be competent for any action to be taken by now.

Agreed.  But the LA know that they didn't apply for building control so no indemnity policy can be offered.   

Are the mortgage company prepared to take on the (infinitesimal) risk?  I don't think a retention is appropriate here.  

OP, you need to know your buyer's mortgage company's position here.  What you need is a letter from Building Control stating that they will not be taking action against themselves.  That is the quickest route out of this mess.  

How ridiculous.  I do feel for you.  I think at this point the LA would need to take out an injunction against themselves to enforce it.  

Thanks - I'll get that conveyed to the buyer's solicitor, and see if I can get a letter out of Brent. 

Doozergirl

Ginger_Winner said:

My priority is to sell my flat, but the buyer will not complete the purchase with this search result.
Is my only option to indemnify the buyer? - by which I mean that I have to have a legal agreement drawn up whereby I take liability for any future costs in relation to this work?
I feel a somewhat aggrieved that I have to take a financial liability for something that should be accountable to the landlord.... but as I say, my priority is to sell the flat so if that is the only way forward then so be it.

I think you would be mad to do that.  There shouldn't be any money to spend. 

It isn't a big deal in the real world/grand scheme as it will have been done to regs (the only thing they check is the insulation!), it's just the paperwork and buyer's perception blowing it out of proportion.   

You need the letter.  Beyond that, your buyer will be being unreasonable as others will accept it.