In the process of buying an ex council flat - should I be worried about large bills for major works?

Mildreds_Earrings

@Raneynickel4  Your Solicitor will ask the Seller's Solicitor to arrange for the LPE1 Form to be completed. The Council/landlord/freeholder will complete the form for a fee and yes any recent previous and future major works are declared on the LPE1 form. Speak to your Solicitor and Google 'LPE1 form'. 

ODEN33

@Raneynickel4  Bought one over 5yrs ago, never been asked to pay anything. Of course the block is ok. The management pack/LPE1 will have all the info

btcp

We lived in a council leasehold flat for a few years, in Central London. We had bills from
them twice - for the boiler and for the roof repair. The bills were in thousands and we paid by instalments. They hired very expensive contractors and you cannot influence the price they agreed. We could afford to pay but it feels like they were taking advantage of us. Never again. 

Marvel1

A post from a few days ago
https://forums.moneysavingexpert.com/discussion/6269486/10k-major-works-charge

firebubble

This is my experience of buying an ex-council flat, which I am currently in the process of selling (one reason being the awful major works bills). I bought my flat over a decade ago, and right at the last minute, it turned out that the seller had been concealing the fact a £5k major works bill was imminent (it showed up in the local searches, but the seller claimed he knew nothing because his tenant had thrown away the paperwork - this is probably a lie, because major works notices have to be clearly flagged so they are usually printed on coloured paper with lots of bold so that whoever opens it is in no doubt that this is a serious document). In the end, he agreed a £5k allowance (ie, he covered the cost, but preserved the overall sale price). 

About 5 years ago, the council then started another major works process. The bill for this was £17k per flat. It still makes me furious as my flat didn't actually need much work, and so what was done was unnecessary. What became apparent was that this was the case across the entire borough, so the major works bought absolute misery and hardship to many. The payment options were 100% within 6 months (this applied if you were a leaseholder (ie privately owned your flat)) and were legitimately renting it out to private tenants, or if you were an owner occupier you could pay over 3 or 5 years interest free or you could add the bill as a second charge over the property (where it accrued interest) and would be payable when the property was sold (a nice little investment earner for the council). Shortly after this bill, we got another bill for £2k for 'emergency lighting' (which was completely unnecessary as this is a low rise building which has plenty of windows and surrounding street lights). The council were able to force this additional bill through as it related to the safety of the building.

Unfortunately, there was no way to challenge either bill - leaseholders cannot object on the basis that the costs are unreasonable, and there is no obligation on landlords to consider reasonableness when looking at what work needs to be done. Unfortunately also where a council confirms that there are no plans for major works, they don't have to stick to this. I still have the piece of paper where they stated that no major works were planned for the next 8 years, only to change this 3 years in. 

The council does not operate a sinking fund.

My suggestions, based on my experience, are: 1. take any answers from the council as to the frequency of major works with a pinch of salt. 2. If the council doesn't operate one, start your own sinking fund so you are ready when the bill comes. 3. Look at the lease to see what the landlord is obliged to do and how often, but consider that as a minimum starting point. 4. Find out if the council has a policy of a voluntary cap on major works bills so you can at least plan for that. 5. Grenfell had a big impact - look at the safety of your building and what is needed to bring it up to the highest standards, because this is where the big bill could come from, eg does it have quality emergency lighting - if not, that will be what they do next, and it's expensive. 6. Lifts and door entry systems need periodic overhauls, so ask more detail about these and any other expensive communal facilities.

I'm desperate to sell quickly and would never buy a flat again but I stayed there a long time. Some people do time it right, getting in and out before the big bills come, so consider in light of how long you plan to stay there.

AnotherJoe

"should I be worried about large bills for major works"

Yes, you should.