selling flat with section 20

Tiglet2

[Deleted User] said:

eddddy said:

[Deleted User] said:

...but is it fair for the seller to ask for a further reduction on the flat when they already have a a 15k reduction? 

To be honest, it's not really a question of what's fair - it's more a question about the mindset of the buyer.

When the buyer finds out, they might do a number of things including...

• Be angry that you didn't mention the section 20 earlier - before they instructed solicitors, applied for a mortgage etc

• Reduce their offer by £2k, because of the cost of the s20 work

• Reduce their offer by £3k, £4k or £5k - in case the cost overruns, and/or because of the hassle
  
  
• Leave their offer as it is, but want a retention to cover the cost of the s20 work (i.e. they buy the flat, but you still have to pay for the s20 work.)

• Leave their offer as it is - with no conditions.

• (I guess they might even decide to walk away - especially if things aren't explained clearly to them)

Are you selling through an estate agent? Did you tell the estate agent about the s20 work?

It might be an idea to tell the estate agent now, so that they can call the buyer and "break it to them gently", explain the situation, and give things a positive spin.

That might be better than the buyer finding out in a starkly worded letter from their solicitor.

I have told them about the roof, the thing is, the s20 is at its end stage, its being actioned this month and it will be done before they move in so that's why I didn't say anything at first at the viewing or when the offer was initially accepted, I've not even received a memorandum of sale yet, property is still on the market so think the tone of your comment is unfair, they haven't had to instruct or pay for anything as yet, and I have told them there are works on roof when I was asked, I just didn't go in to details cause I knew that it would put a buyer off before they knew the facts. section 20 sound way worse than what it is. My question was about whether it was fair to use the section 20 as a way for a buyer to save money, but I guess its a stupid question to ask now I think about it, i wondered if anyone else had been in the same situ and could advise.

TK, there was nothing wrong with the "tone" of eddddy's advice.  Eddddy is a well respected and knowledgeable poster about how leasehold, management companies and right to manage companies work.  His advice is sound and is just demonstrating how your situation could be received by the other side. 

I think I may already have said on this thread, but a copy of the Section 20 would have been supplied by your solicitor to the buyer's solicitor during the course of the transaction, but rather than let the buyer discover it half way through the process, it would have been better to be upfront about it from the start, then the buyer could have made their offer based on having that knowledge.  Finding out about it now will probably mean that they will want to renegotiate the deal. 

CSI_Yorkshire

[Deleted User] said:

eddddy said:

TK_5431 said:

...but is it fair for the seller to ask for a further reduction on the flat when they already have a a 15k reduction? 

To be honest, it's not really a question of what's fair - it's more a question about the mindset of the buyer.

When the buyer finds out, they might do a number of things including...

• Be angry that you didn't mention the section 20 earlier - before they instructed solicitors, applied for a mortgage etc

• Reduce their offer by £2k, because of the cost of the s20 work

• Reduce their offer by £3k, £4k or £5k - in case the cost overruns, and/or because of the hassle
  
  
• Leave their offer as it is, but want a retention to cover the cost of the s20 work (i.e. they buy the flat, but you still have to pay for the s20 work.)

• Leave their offer as it is - with no conditions.

• (I guess they might even decide to walk away - especially if things aren't explained clearly to them)

Are you selling through an estate agent? Did you tell the estate agent about the s20 work?

It might be an idea to tell the estate agent now, so that they can call the buyer and "break it to them gently", explain the situation, and give things a positive spin.

That might be better than the buyer finding out in a starkly worded letter from their solicitor.

I have told them about the roof, the thing is, the s20 is at its end stage, its being actioned this month and it will be done before they move in so that's why I didn't say anything at first at the viewing or when the offer was initially accepted, I've not even received a memorandum of sale yet, property is still on the market so think the tone of your comment is unfair, they haven't had to instruct or pay for anything as yet, and I have told them there are works on roof when I was asked, I just didn't go in to details cause I knew that it would put a buyer off before they knew the facts. section 20 sound way worse than what it is. My question was about whether it was fair to use the section 20 as a way for a buyer to save money, but I guess its a stupid question to ask now I think about it, i wondered if anyone else had been in the same situ and could advise.

Is it fair for you to try and hide the facts from your buyer as a way for you to make money?  You're not doing that, but you can imagine your buyer coming on here in a few weeks with that same question - "how much discount should I ask for when there was an s20 that they didn't tell me about?".

Many people have been in the same situation, both buying and selling.  What happens in the end is one of the several options nicely laid out by eddddy in their bulleted list.  Which one happens depends on the buyer and the seller.

Jonboy_1984

Part of the reason for the LPE1 is it was common for owners to get wind of a section 20 program, and get the property sold quickly “as moving for work”, “moving to care for relatives” or using many of the other excuses for a quick sale and hoping to saddle the unknowing buyer with it unfairly.

I would anticipate their solicitor recommending a retention to cover the cost of the works if not paid before you sell and a negotiation between you as they will benefit from the works. 

Is there a sinking fund you have paid into that they will benefit from later as it might be a negotiating factor to point it out and offset part of the cost.

CSI_Yorkshire

TK - You've had two replies that you didn't like, and have responded aggressively to both.  This isn't conducive to good discussion or good advice.

If you actually read my post, you will note that I said "You're not doing that" quite specifically - simply pointing out that your buyer (whose opinion you claimed to be wishing to understand) may consider things differently.