Management Company Preventing Sale

Naylz_

We are in the process of selling our flat and purchasing a house. Our purchase is ready to go, and our sale is nearly there but there is an outstanding query regarding some recommendations for work which were raised in a recent fire risk assessment. The fire risk assessment was completed in April, and there were a few minor recommendations. The buyer's solicitors have asked a query about whether any costs for these works will be passed onto the tenants, which we appreciate is a reasonable request. The management company have responded to us and said it will take time to get these recommendations put to the freeholder (local council), and a decision to be made on the works, and they expect to have an answer by April 2024. 

The buyer has had an independent fire risk assessor look at the recommendations and is happy to proceed and take a view on the questions, however his mortgage company has responded to say they will not be happy to release funds without an answer to the outstanding query. The buyer currently has a mortgage offer at 2.9% which is expiring at the end of august, and has made clear that he will not be able to afford a new mortgage at the current rates. 

I have emailed, called, and submitted website forms to both the management company, and the local council to try to chase up and find out why they are unable to complete this work sooner. However, currently they have ignored every bit of contact, and I haven't had a response in the last couple of weeks. (I have previously had contact with both parties, so unsure why communication has ceased now). 

Does anyone have any advice? We are sort of at a stand off where it looks like we are going to lose our buyer when the mortgage offer expires, and no way of chasing the management company / council or any indication they will get and answer on if any works need doing before April 2024, which seems like an awfully long time. 

theartfullodger

Physically go to their offices, 1st thing tomorrow, calm polite and friendly.

jlfrs01

I assume the buyer's lender and solicitor have seen the original assessment and have had sight of what the recommendations are? If so, what is the nature of these recommendations and this "outstanding query"?

I know from my own experience selling a flat last year that lenders have become incredibly conservative when it comes to lending post-Grenfell so anything concerning fire risk is a huge red flag for them.

In my case, I had an offer with Nationwide on the property I was buying and the exact same thing happened. We got into a stalemate here because "minor recommendations" are just that and the Council and Maintenance Company may not view them as needing a quick response or like an advisory on an MOT to be noted or ignored, particularly if there's money involved.

Nationwide wouldn't budge so I had no other option but to go to another lender (Halifax) who were a lot more reasonable and it was smooth sailing.

So, unless your Solicitor knows of any sort of insurance policy or measure he or she can use to placate your buyer's lender, their best course of action is probably to seek a new loan from an alternative lender pronto, just in case.

Naylz_

jlfrs01 said:

I assume the buyer's lender and solicitor have seen the original assessment and have had sight of what the recommendations are? If so, what is the nature of these recommendations and this "outstanding query"?

I know from my own experience selling a flat last year that lenders have become incredibly conservative when it comes to lending post-Grenfell so anything concerning fire risk is a huge red flag for them.

In my case, I had an offer with Nationwide on the property I was buying and the exact same thing happened. We got into a stalemate here because "minor recommendations" are just that and the Council and Maintenance Company may not view them as needing a quick response or like an advisory on an MOT to be noted or ignored, particularly if there's money involved.

Nationwide wouldn't budge so I had no other option but to go to another lender (Halifax) who were a lot more reasonable and it was smooth sailing.

So, unless your Solicitor knows of any sort of insurance policy or measure he or she can use to placate your buyer's lender, their best course of action is probably to seek a new loan from an alternative lender pronto, just in case.

The query is simply, will there be any work done and will there be any cost to the tenants for this work. There is a reserve fund in place which we’ve been informed by solicitors should have enough in it to cover any works if needed. And we have offered to put down money as a retention, but this has been declined by the mortgage company. 

The recommendations: no high risks, couple of medium risks i.e. couple of small holes (1cm diameter) in the water meter cupboard which need filling to stop the spread of smoke if there were a fire. Through to low risks such as, ensure fire prevention advice is emailed to tenants. 

Appreciate the response! 

eddddy

Naylz_ said:

The query is simply, will there be any work done and will there be any cost to the tenants for this work. There is a reserve fund in place which we’ve been informed by solicitors should have enough in it to cover any works if needed. And we have offered to put down money as a retention, but this has been declined by the mortgage company. 

The recommendations: no high risks, couple of medium risks i.e. couple of small holes (1cm diameter) in the water meter cupboard which need filling to stop the spread of smoke if there were a fire. Through to low risks such as, ensure fire prevention advice is emailed to tenants. 

Appreciate the response! 

It sounds very frustrating.

I guess another approach might be to see if the mortgage company will refer the matter back to their valuer - so that the valuer can give their opinion on the total cost of the work. (And hopefully confirm that the cost is tiny.)

But you can't pressure the buyer's mortgage lender to do that - it needs to come from the buyer.


What is the buyer's view on all this? Are they 'savvy' and understand that the work required is trivial and low cost?  Or have they been spooked because phrases like "Fire Risk Assessment" sound scary?

Naylz_

eddddy said:

Naylz_ said:

The query is simply, will there be any work done and will there be any cost to the tenants for this work. There is a reserve fund in place which we’ve been informed by solicitors should have enough in it to cover any works if needed. And we have offered to put down money as a retention, but this has been declined by the mortgage company. 

The recommendations: no high risks, couple of medium risks i.e. couple of small holes (1cm diameter) in the water meter cupboard which need filling to stop the spread of smoke if there were a fire. Through to low risks such as, ensure fire prevention advice is emailed to tenants. 

Appreciate the response! 

It sounds very frustrating.

I guess another approach might be to see if the mortgage company will refer the matter back to their valuer - so that the valuer can give their opinion on the total cost of the work. (And hopefully confirm that the cost is tiny.)

But you can't pressure the buyer's mortgage lender to do that - it needs to come from the buyer.


What is the buyer's view on all this? Are they 'savvy' and understand that the work required is trivial and low cost?  Or have they been spooked because phrases like "Fire Risk Assessment" sound scary?

That's worth a try! Understand that it's the buyers responsibility to do this though. 

The buyer has a family relative who is a fire risk assessor, and has confirmed the work is trivial, so they are not concerned about the work. The buyer is quite happy to proceed with the purchase knowing the recommendations in the fire risk assessment.