Buying Leasehold Flat - Are These Red Flags?

Mercurial

I've made an offer on a leasehold flat and once I received the lease from my solicitors I went to companies house and looked up the landlord.

Would these issues put you off?

Accounts Overdue
Confirmation Statement Overdue
Company Status: Active Proposal to Strike off suspended
They had a separate company for students which has gone into administration 
In the previous ten years have traded under two different names
3/4 of the board resigned

Any advice would be appreciated. 

TIA

eddddy

I guess things to look into include...

Does the landlord manage the building? If they do, is the building well managed?

Is it an arrangement where some/all of the leaseholders formed a company to buy the freehold?

And more generally - what is the company's business? For example, is it an active, trading business, or a 'vehicle' for owning a building?

user1977

And is it definitely the current freeholder you're looking at? Or have you just looked up the one who signed the original lease?

john600602

The block I live in is currently in dispute and we too have overdue accounts, in our case it's been up to 3 years (2020 accounts not published until March this year).  Likewise they changed name end of 2017.  If everything else ran like clockwork I might be more leanient but the block has fallen into neglect and there's no sinking fund statement available.    I would proceed with caution and check if expected works are being done and ask for proof of the sinking fund as with our block we appear to have been paying into a black hole.

Mercurial

eddddy said:

I guess things to look into include...

Does the landlord manage the building? If they do, is the building well managed?

Is it an arrangement where some/all of the leaseholders formed a company to buy the freehold?

And more generally - what is the company's business? For example, is it an active, trading business, or a 'vehicle' for owning a building?

The landlord manages the building and their business is ,"Other letting and operating of own or leased real estate".

Unfortunately,  in two years the ground rent will be over £250 which will mean it will be a Assured Tenancy with no option to buy freehold.

Mercurial

user1977 said:

And is it definitely the current freeholder you're looking at? Or have you just looked up the one who signed the original lease?

It's definitely the current freeholder.

Mercurial

john600602 said:

The block I live in is currently in dispute and we too have overdue accounts, in our case it's been up to 3 years (2020 accounts not published until March this year).  Likewise they changed name end of 2017.  If everything else ran like clockwork I might be more leanient but the block has fallen into neglect and there's no sinking fund statement available.    I would proceed with caution and check if expected works are being done and ask for proof of the sinking fund as with our block we appear to have been paying into a black hole.

Thanks.  The late submitting of accounts and confirmation statement is a worry but isn't a suspended compulsory strike off even more concerning?

user1977

Mercurial said:

john600602 said:

The block I live in is currently in dispute and we too have overdue accounts, in our case it's been up to 3 years (2020 accounts not published until March this year).  Likewise they changed name end of 2017.  If everything else ran like clockwork I might be more leanient but the block has fallen into neglect and there's no sinking fund statement available.    I would proceed with caution and check if expected works are being done and ask for proof of the sinking fund as with our block we appear to have been paying into a black hole.

The late submitting of accounts and confirmation statement is a worry but isn't a suspended compulsory strike off even more concerning?

Presumably that just followed from the accounts/confirmartion statement being overdue? So doesn't really prove much more than they're a bit sloppy with admin.

Mercurial

"Presumably that just followed from the accounts/confirmartion statement being overdue? So doesn't really prove much more than they're a bit sloppy with admin."

Maybe, but if they can't be bothered to submit their accounts and confirmation statement on time that would lead to ask what else are they a bit sloppy with?

user1977

Mercurial said:

"Presumably that just followed from the accounts/confirmartion statement being overdue? So doesn't really prove much more than they're a bit sloppy with admin."

Maybe, but if they can't be bothered to submit their accounts and confirmation statement on time that would lead to ask what else are they a bit sloppy with?

If you like, but I wouldn't regard it as a "red flag".

Mercurial

user1977 said:

Mercurial said:

"Presumably that just followed from the accounts/confirmartion statement being overdue? So doesn't really prove much more than they're a bit sloppy with admin."

Maybe, but if they can't be bothered to submit their accounts and confirmation statement on time that would lead to ask what else are they a bit sloppy with?

If you like, but I wouldn't regard it as a "red flag".

Fair enough but they are over 6 months late filing accounts which is a £1,500 fine according to gov.uk website.  No doubt that gets passed onto the leaseholders through service charges.  I definitely have an issue with that.