Messy situation with leasehold loft - advice appreciated

viper_987

Hi,

I'm currently selling my leasehold apartment, and a complication has arisen due to the loft space.
The apartment is on the top floor, and has accessible loft space. A few years ago, I had this space boarded out for storage, and lights installed.
However, it turns out that the loft space was not within the demise of the lease, and therefore not legally mine to use.
The buyer initially requested a deed of variation, to include the loft space, but I declined due to:
1. additional fees (solicitor and landlord),
2. the landlord needing to agree to it,
3. the estate management company getting involved,
4. and the risk of being told I was in breach of the lease and must restore the loft to its original condition.

My solicitor offered an indemnity contract to address the issue, but the buyer declined.
The buyer then requested that I have the loft restored anyway. I contacted the original fitters and they are not interested in doing the work. 
I could try and find someone else to do the work, but I am unsure whether it could be done without damaging any existing structures.


What should I do? If the buyer had not mentioned the loft space to their solicitor in the first place, the issue need not have arisen. I am tempted to put the property back on the market and telling prospective buyers not to mention the loft space, but the current sale is close to completion besides this remaining issue.

Thanks

GrumpyDil

In this case I think the indemnity would have been the best option, assuming the boarded loft was not used to justify a higher price. 

If they won't accept the indemnity policy then you appear to have two choices, regularise the situation with the landlord or revert the loft space back. Regularising the space would likely involve costs. 

anselld

Just tell the buyers you are not prepared to do anything else so they either accept as is (or with indemnity) or you will re-market.

The risk they are taking is minimal.  The freeholder is unlikely to discover.  If they do discover they are unlikely to require boarding and lighting to be removed.  If they do require it removed the cost is unlikely to be significant.

eddddy

As you suggest, perhaps it would have been better to suggest to the buyers at the outset that they don't mention the 'informal' use of the loft to their solicitor.

And a formal letter/report from a solicitor will often present the 'worst case scenario', which might scare the buyer. (e.g. Legal action by the freeholder, cost of reinstatement, forfeit of lease, etc.)

Assuming you have a good estate agent, it's probably worth getting them to have an 'informal chat' with the buyer to talk through the risks, the potential benefits, etc, associated with the loft. That might get better results than a formal letter from a solicitor.

Brie

Is the only access to the loft via your flat?  Is there anything up there that the freeholder would ever need to access??  That's what might effect things if I was the buyer.

viper_987

Brie said:

Is the only access to the loft via your flat?  Is there anything up there that the freeholder would ever need to access??  That's what might effect things if I was the buyer.

Yes the only access is via my flat. There is nothing there that the freeholder would ever need to access, no. In fact no one else has ever been up there since I lived there (over 15 years).

propertyrental

If buyer does not want an indemnity policy, which is the cheap, quick solution to the problem, then either the buyer accepts the 'as is' staus quo or you and buyer go your separate ways.

Involving the freeholder/Manco would be slow, potentially expensive, and uncertain, and re-instating the loft also pointless, costly, time-consuming, and might reduce the property value if/when this paranoid buyer pulls out!

born_again

Quick cheap MSE solution.
Find someone to plasterboard over the access. No one is any the wiser to what is up there.

NameUnavailable

born_again said:

Quick cheap MSE solution.
Find someone to plasterboard over the access. No one is any the wiser to what is up there.

That's great until the roof starts leaking and the freeholder needs access!

OP - was the loft space mentioned in the sales particulars by the EA? Assuming it was I can understand how the buyer feels, they 'paid' for something that's not yours to sell and it could also cause them issues down the line as there is a breach of the lease.

If they are happy to proceed without 'owning' the loft space maybe a letter from yourself confirming that you had the loft boarded etc., so that if the freeholder ever queried it they can show that they didn't do the work, and they aren't breaching the lease by using it either, although I'd probably want legal advice as to whether that's sufficient. The worst case scenario is that the freeholder demands the loft is returned to its original state, but I can't think why they'd want that assuming the work has been done correctly.

The risk from your point of view is that if you go to the freeholder now they will make demands for ££££ for retrospective permission and amending the lease (if they agree to it) or action against you for breaching your lease.

Maybe the easier option is to find new buyers, make sure the loft isn't mentioned at all by the EA and if they ask about it you just say it's not your space and don't mention the boarding etc., and then if the new buyers decide to use it, or ask the freeholder about it, it's their choice.

viper_987

@NameUnavailable

Yes, the loft access was mentioned in the estate agent's listing (although no mention of the boarding or lights). If I do relist, I'll make sure this is removed.

I'll talk to my solicitor about the idea of a letter. Maybe I could offer a small reduction in the price.

Agree, there's a risk involving the freeholder. I have no idea what they'd say.

eddddy

I'm not really sure how the letter described would help the buyers - and it could cause you problems.

If the freeholder finds out the loft is boarded, the buyers just say the loft was like that when they bought the flat (they don't need to show a letter). How could the freeholder prove otherwise?

If you provide a letter, and the buyers show the freeholder your letter, that just makes it really easy for the freeholder to sue you for damages. 




(I doubt the lease explicitly says "The leaseholder must not board the loft" or equivalent, so it probably can't be treated as a "breach of lease".

But if it is a "breach of lease", the letter won't help the buyer in any way. They would still be liable for the breach of lease, whatever the letter says.)