Major Works in Sell On Pack

Flibbertigibbet4545

Currently in the process of selling my leasehold flat. The sell on pack from the freeholder identifies some major works that may be (but also could not be) taking place in two years time. No notice of intention or Section 20 has been issued and might not be for at least another year. Am I under any obligation to reduce the price of the flat to a seller and by how much, given that I do not have an estimate of costs so no idea if they are likely to cost £10k or £25k! 

user1977

You're not under any sort of obligation to sell at any particular price (generally speaking).

Will it tend to reduce the market value of the property? Well, I guess it might, though depends on the nature of the works.

Flibbertigibbet4545

On the contrary it apparently could involve new window frames and redecoration so could increase the value. Don't see how it would reduce it. 
I have a potential buyer who is pushing for a price reduction on the basis of the work, but that seems a bit premature to me, given that I have no guarantee it'll actually be done!

eddddy

Flibbertigibbet4545 said:

 Am I under any obligation to reduce the price of the flat to a seller and by how much, given that I do not have an estimate of costs so no idea if they are likely to cost £10k or £25k! 

In simple terms, there are no rules. It's all down to negotiation.

• The buyer is free to ask for a discount
• You are free to say "yes", "no" or to try to negotiate a compromise
• If you're unable to reach an agreement with the buyer, the sale won't happen

Typically, it boils down to the mindset of the seller and the mindset of the buyer.

For example, if the buyer is desperate to buy the flat - they might buy it , even if you refuse to give any discount. If you're desperate to sell the flat, you might agree to a discount in order to stop the buyer walking away.


If you're selling with an estate agent, they normally handle the negotiation. They will try to push both the seller and the buyer into reaching some kind of agreement.

Tiglet2

Flibbertigibbet4545 said:

On the contrary it apparently could involve new window frames and redecoration so could increase the value. Don't see how it would reduce it. 
I have a potential buyer who is pushing for a price reduction on the basis of the work, but that seems a bit premature to me, given that I have no guarantee it'll actually be done!

The buyer's solicitor may ask for a retention where your solicitor holds some extra funds following completion that the buyer can claim should they receive any invoices in the near future (likely to have a 12-18 month limit before the retention can be returned to you if no claim received).

On the other hand, these works may take a while to actually take place if the freeholder/man co want to obtain quotes/tenders for the job.  Since the buyer will be benefitting from new windows and redecoration, you might consider that they should pay for them.

user1977

Retentions are a messy solution even where there is more definite idea of costs and timescales - I would strongly resist going down that route when, for all anybody knows, the vague proposals could still be outstanding by the time the buyer sells on.

In my mind you buy a property knowing that from time to time things will need repaired/renewed, and the timing of the works might end up falling close to a sale. It doesn't really affect the underlying value of the property. Different perhaps if there's a massive cost due to fall shortly after somebody has just bought.

Flibbertigibbet4545

Thank you all. While I don't want to be unreasonable, I do feel that setting aside money for upkeep/maintenance is part of owning a home. These major works were not instigated by us and we have no control over them (aside from the standard consultation if that actually happens at the time we own the property).