Help with purchasing a leasehold flat, practically freehold. No responses on LPE1 form

vtochevska

Thank you everyone, I appreciate your input and responses!
The lease states it must be insured at all times with a comprehensive insurance, which is pretty much it. Nothing about what exactly should be covered.
It is quite a tricky one and I'll try and figure all this out with my solicitor today. I definitely think a joint policy is the best option however this depends on the neighbour... 

eddddy

davidmcn said:

eddddy said:

That seems to make the insurance situation very strange. There's one roof which would be half insured by your policy, and half insured by by somebody else's policy.

Not all that strange, it's pretty commonplace in Scotland for each flat owner to arrange their own insurance (including for their respective interests in the common parts). Obviously claims are simpler if there is just a single policy for the block.

I guess so. But how does that work in practice?  For example, if a burglar does £2k worth of damage to a communal front door to 5 flats - does that require 5 insurance claims of £400 each, with 5 excesses being paid?

davidmcn

eddddy said:

davidmcn said:

eddddy said:

That seems to make the insurance situation very strange. There's one roof which would be half insured by your policy, and half insured by by somebody else's policy.

Not all that strange, it's pretty commonplace in Scotland for each flat owner to arrange their own insurance (including for their respective interests in the common parts). Obviously claims are simpler if there is just a single policy for the block.

I guess so. But how does that work in practice?  For example, if a burglar does £2k worth of damage to a communal front door to 5 flats - does that require 5 insurance claims of £400 each, with 5 excesses being paid?

Yes, I expect so, if people thought it worthwhile claiming.

vtochevska

Fair question, I suppose if there was damage to a shared part we would both have to claim, and the insurance companies would split the cost...

Mildreds_Earrings

"Please confirm whether your client is aware of any planned, unbilled or pending major works

- Our client is selling with limited title and has never lived at the property therefore cannot answer this question. Please rely on your own surveys and inspections."

This right here is alarming to me. The Seller will need to find out from the freeholder or the managing agents or the other leaseholders whether major works are planned. What if the roof needs to be replaced or the windows need to be replaced? You need to know now because once you have purchased the property, this will be your responsibility (split with other leaseholders) and we're talking thousands of pounds, whilst the daughter is in St Tropez spending the proceeds from the sale! 

The daughter has a financial interest in the property but she doesn't want to drive 40 miles to the property? Oh poor diddums! The lack of responses in the LPE1 form is worrying. Your Solicitor should be insisting on a more comprehensive and full response. Living 40 miles away, isn't a get out clause! 

vtochevska

Mildreds_Earrings said:

"Please confirm whether your client is aware of any planned, unbilled or pending major works

- Our client is selling with limited title and has never lived at the property therefore cannot answer this question. Please rely on your own surveys and inspections."

This right here is alarming to me. The Seller will need to find out from the freeholder or the managing agents or the other leaseholders whether major works are planned. What if the roof needs to be replaced or the windows need to be replaced? You need to know now because once you have purchased the property, this will be your responsibility (split with other leaseholders) and we're talking thousands of pounds, whilst the daughter is in St Tropez spending the proceeds from the sale! 

The daughter has a financial interest in the property but she doesn't want to drive 40 miles to the property? Oh poor diddums! The lack of responses in the LPE1 form is worrying. Your Solicitor should be insisting on a more comprehensive and full response. Living 40 miles away, isn't a get out clause! 

@Mildreds_Earrings, I'm looking into all kinds of indemnity insurance policies but I don't think there is one which could cover me for anything I will have to contribute to and didn't know about before buying. The roof and outside of the property look well maintained so I just have to hope for the best if I decide to go ahead. I will be going to speak to the neighbour tomorrow as this is the only option left and hope that she is kind enough to tell me what her insurance covers and whether is willing to take a joint policy with me. Wish me luck!

Mildreds_Earrings

Hello there, I think that's my point.  You shouldn't have to 'hope for the best'.  This is an expensive purchase, which might cost considerably more in future, than you had first thought.  The Seller's daughter should complete the LPE1 form to the best of her ability and if she doesn't know the answers, then she should get in her car, drive to the building and investigate or ask the other leaseholders what systems they have in place.  It sounds as if she knows you will accept her poor responses, so hasn't bothered to investigate.  Remember if there are major works planned in future, you can renegotiate the purchase price.

Try to speak to all the leaseholders in the block if you can, and ask them about potential major works to the building and if they have a sinking fund.  It's a good way to meet them anyway.  Also, tell your surveyor that you don't know about major works, so ask the surveyor to see if he can inspect the roof (they can use a drone) windows, doors etc and be really thorough.  

I realise that you are excited but please do not let your heart rule your head.  You may regret it......
All the best and I hope things work out for you. 

vtochevska

Mildreds_Earrings said:

Hello there, I think that's my point.  You shouldn't have to 'hope for the best'.  This is an expensive purchase, which might cost considerably more in future, than you had first thought.  The Seller's daughter should complete the LPE1 form to the best of her ability and if she doesn't know the answers, then she should get in her car, drive to the building and investigate or ask the other leaseholders what systems they have in place.  It sounds as if she knows you will accept her poor responses, so hasn't bothered to investigate.  Remember if there are major works planned in future, you can renegotiate the purchase price.

Try to speak to all the leaseholders in the block if you can, and ask them about potential major works to the building and if they have a sinking fund.  It's a good way to meet them anyway.  Also, tell your surveyor that you don't know about major works, so ask the surveyor to see if he can inspect the roof (they can use a drone) windows, doors etc and be really thorough.  

I realise that you are excited but please do not let your heart rule your head.  You may regret it......
All the best and I hope things work out for you. 

Thank you @Mild@Mildreds_Earrings, this is very helpful, I completely agree and trust me, I am very excited but also very thorough. Sometimes so thorough that I think I should really let some things go. I do agree that I have to know about any major works coming up and what has been done in the past, which is why I think speaking to the neighbour might shed some light. There is no sinking fund because no service charge and the freeholder and managing agent don't get involved. This only leaves the neighbours, since the daughter doesn't know anything. I will also be inspecting the roof again and going into the loft this week. The flat hasn't been redecorated in many years but there is no sign of leaks etc, also the roof and outside of the property are in very good condition so things must be working well somehow. If the neighbour doesn't provide any information, which I doubt as she was very kind before and told me who her insurance is with, I will get back to the owner and request for her to find this out. This has been way too stressful so far and the situation seems quite inconvenient for both sides, but I am taking the risk so you are absolutely right, I need to make sure I know what I am getting myself into. Thanks once again

Tiglet2

The freeholder and/or managing agent should be answering the enquiries on the LPE1, not the daughter as executor.   I know you have said that the freeholder/managing agent do not appear to be involved, but if there are major works to be done on the building then it would be their responsibility.  I really think you need to take the advice of your solicitor on this and maybe ask for a fairly large retention in case of any unknown expenses in the next year or so.

yksi

I have just bought a leasehold flat, not the exact situation, but it was in the hands of a mortgagee-in-possession, so like your case, they were answering with a lot of "we don't know" type things. My advice is to push back via your solicitor. Your solicitor should know that these things need answers and should be going back to them and saying that the answers are not good enough. In your case, there are several instances where they have not answered the question at all and several where you have asked if they're aware and they just redirect you somewhere else instead of answering a yes or no. It's a yes or no question. Do they know if yarda? Yes or no! You either know or you don't! You don't say "go ask a neighbour". 

In many cases it will cover your backside just to get them saying they are not aware! That is the whole point.
Forget about who insures and maintains the building and go back a step. Your first problem is that you are not getting your paperwork sorted to cover yourself legally with this purchase. For the vast majority of buyers of ANY property, not getting straight and comprehensive answers from the seller is a major red flag, if not, a dealbreaker. Any half-way decent solicitor knows this, but apparently, yours isn't pushing them for proper answers and hers is doing a shoddy job. Just so that you see where I'm coming from, for my own flat, two sales fell through before me because the seller would not / could not provide the answers to their questions. Both times, the buyers pulled out and the sale was lost. I pushed back - hard - and demanded answers - and waited - and they threatened to cancel the sale because I was "taking too long" but they knew that they would simply lose a third sale if they didn't find these answers. And guess what, somehow, they did.

This is too much money, and stress, and worse, liability, for you, to risk financial ruin just because you like the flat. If it's meant to be your home, then they will start playing ball. And if your solicitor wants her fee, she will start doing her job. Ask the very simple questions, like, "Is this the sort of answer that I should be comfortable with / Does this non-answer expose me to problems / Do I need a more detailed answer to this question?" The solicitor is being paid to give you legal advice and if they say it's not enough, the should then tell you how to either get around it or get the answer they need.