Selling with a section 20

Adly812

I have an investment but to let flat that I am wanting to sell to free up some cash that I need to help with this past year, as I have been impacted by the restrictions imposed due to the virus and works been negatively affected.

The flat is not mortgaged as the investments are cash buy only. 

Unfortunately the timing is not great as i was given a section 20 because of remedial works needed to comply with the new tighter fire safety requirements. 

I have paid my flats estimate bill for the works however.

id like to sell it but ... is it possible to sell in this case ? Is it better to put it through auction or try find an agent to sell it ? 

Mildreds_Earrings

Hello, you can sell your leasehold flat any time you want. However, that's good that you paid the estimate in advance, as the Buyer won't have to pay it. That is the estimate, not the actual completion figure though.

When you find a Buyer, their Solicitor will send your Solicitor a LPE1 form, which presumably, you will give to the freeholder. That's when the S20 major works, costs etc will be declared.

I work for a Housing Association and we complete LPE1 forms for a fee. Whether or not the leaseholder decides to sell during S20 Consultation does not matter, as we provide details /attach major works details, works required, estimated costs etc as part of the LPE1 form. 

Find an agent to sell the property for you. You may get less at auction. All the best. 

Adly812

Thank you for your help. Does the LpE1 form mean that if the costs of the remedial are more than estimate then I would be liable to pay after completion ?

Mildreds_Earrings

Adly812 said:

Thank you for your help. Does the LpE1 form mean that if the costs of the remedial are more than estimate then I would be liable to pay after completion ?

Yes, as you can appreciate, we can only give an estimated cost during S20, not an actual amount. However it is rare for our Housing Association to charge above the estimated amount when we get the final figure once works have completed. We only charge our leaseholders when the works are completed anyway. The final invoice is sent within 6 months of the works completed. 

L_T_88

Adly812 said:

Thank you for your help. Does the LpE1 form mean that if the costs of the remedial are more than estimate then I would be liable to pay after completion ?

They will be billed to the owner of the property at the point of billing.  As you've paid on estimate, I'd assume that as part of any sale you will agree who will pay for any shortfall, or recieve any underspend back - but the LPE1 itself does not bind you to anything.

Adly812

Will a liability period be applied, for example if the works I pay for go ahead the X amount, and I pay it, what happens if the works needs revisited in five years time perhaps ? Could I be held liable for the cost again ?