Vendors contribution to rewiring.

yorkshireladdie

My daughter is just buying a house which following a structural survey urgently needs rewiring. The vendor is happy to split the cost with my daughter ( a £2,000 contribution) but if it comes off the purchase price she won’t have the money to do the work. 

The ideal solution would be a side agreement where the vendor pays my daughter the money on the day of completion but I’d prefer it to be legally agreed. Has anyone had experience of this? 

The irony is that when the vendor purchased the property five years ago, they had 50% of the rewiring costs discounted but because it was taken off the purchase price they never had the money to complete the work. 

I don’t want her to fall foul of the lawyers but equally I’d like to ensure they get paid the £2,000. They need to complete the rewiring but can’t afford it if the vendor doesn’t pay, 

Any thoughts would be appreciated. Thank you. 

Slithery

yorkshireladdie said:

The ideal solution would be a side agreement where the vendor pays my daughter the money on the day of completion but I’d prefer it to be legally agreed. Has anyone had experience of this?

Not going to happen. Your daughters lender would have to be informed and they would drop the amount they are willing to lend accordingly.

pinkshoes

"urgently" needs rewiring? Why? It probably "urgently" needed rewiring 5 years ago by the sounds of it and the current owner then didn't bother either, as it isn't actually that urgent...

My grandad's house is 90 years old and that probably "urgently" needs wiring too... 

Surveys have to be cautious, otherwise they get people moaning at them. Just ask for a reduction in the selling price instead. 

cheeky-peach

I think the only thing to do here after getting that price reduction from the vendor is to start saving hard now; this is assuming that your daughter hasn't already factored in a 'pot' for works like this?

eddddy

It might be possible to deal with this as a 'solicitors retention'. (Not to be confused with a mortgage retention!)

i.e. Your daughter pays the full purchase price (with the help of her mortgage), but the solicitor holds back £2k of the money to pay towards the eventual rewiring bill. 

(Usually, a solicitor's retention would be for more than the cost of the work - so the work gets paid for using the retention money, and anything left over is given back to the seller. But the principle would also work for a partial contribution.

The same principle is used for Service Charge Retentions on leasehold property purchases.)

You'd need to check that the mortgage lender is happy about this kind of retention, and the solicitor might charge an extra fee for dealing with it.

user1977

Retentions are a complete PITA for everyone - solicitors don't want to be left baby-sitting a pot of money months/years after the transaction has completed (especially if there's no certainty if/when the work will be done, or precisely what it will comprise). Much cleaner just to negotiate the price to correspond with the condition of the property.

Sistergold

Bought my house two years ago and it also urgently needed rewiring. I have not done it and will not do it until I have to. It was not declared dangerous at all! Electrical standards keep changing and thats why they inspect and say it’s urgent but for us the people of it’s not dangerous it doesn’t become urgent. Having said that your daughter might find that after buying the house something else actually needs fixing and can not wait and so it’s a bit worrying to buy a house and not afford £2k to do something. She does need an emergency fund or be able to fall into the bank of mom and dad! 

AdrianC

Define "urgent".
Who said this? A general survey? Or an electrician who did an EICR?

Surveyors aren't sparkies. They flag it as red, but they say "I've not tested it".
If a sparky's done it, what did the EICR say? C1s, C2s, or just C3s?

If not a sparky, get one in.

SpiderLegs

yorkshireladdie said:

My daughter is just buying a house which following a structural survey urgently needs rewiring. The vendor is happy to split the cost with my daughter ( a £2,000 contribution) but if it comes off the purchase price she won’t have the money to do the work. 

The ideal solution would be a side agreement where the vendor pays my daughter the money on the day of completion but I’d prefer it to be legally agreed. Has anyone had experience of this? 

The irony is that when the vendor purchased the property five years ago, they had 50% of the rewiring costs discounted but because it was taken off the purchase price they never had the money to complete the work. 

I don’t want her to fall foul of the lawyers but equally I’d like to ensure they get paid the £2,000. They need to complete the rewiring but can’t afford it if the vendor doesn’t pay, 

Any thoughts would be appreciated. Thank you. 

You can’t have a side agreement that isn’t part of the overall sale of the property and therefore it would need declaring.
you could of course happen to find a brown paper bag full of 20 quid notes that has been left in the property when the daughter moves in. Or perhaps that paper bag will just contain cut up copies of the daily sport. Who knows.... your daughter would have a hard time complaining about that outcome.

so the best approach is to reduce the purchase price, not only because that is what is supposed to happen, but also because your daughter doesn’t really need to be paying interest for 25 years on 2 grand more than she needs to be.

Falafels

If it's just the structural survey that says it urgently needs attention, take note! Surveyors always mark the areas they aren't qualified to inspect with the following rating:

Condition Rating 3 which means:
Defects are present which are either serious and/or in urgent need of repair or replacement, or the surveyor feels that further investigation is required. 

The bit you need to pay attention to is the 'further investigation is required'. This doesn't automatically mean it urgently needs rewiring, just that they recommend an electrician's report. If your electrician tells you it urgently needs rewiring, and gives you a list of defects to support the advice, then pay heed.

Otherwise... all the surveyor has told you is that he/she isn't qualified to judge, and recommends getting a report from someone who is.

yorkshireladdie

Many thanks for all your replies they are greatly appreciated.

I would stress, we completely understand the points about the survey, what I was hoping for was some advice on how others have managed this type of situation more effectively than the standard reduction on the price paid. I've bought and sold six houses so I know how it works. We are not seeking to commit a major crime, just get to win-win.

That said thank you again for all your comments.