Section 20 - how often?

xdulciex

Hi, I'm considering buying a London flat with a hefty (100k) section 20 order from the landlord, who happens to be the local authority. 

If this is a once in a 50-year period problem it’s worth the money, so does anybody know how often this maintenance s20 is likely to be reissued? It’s covering things like windows, roof etc. so obviously not a once in forever thing, but the frequency will determine whether the place is value for money (as 100k is a lot of money 😄). Is it possible to check the history of s20s issued on a property?
Thanks!

DullGreyGuy

£100k is the total bill or your share of it?

Some things will be routine maintenance, windows may need replacing every 30 years, and others will be more exceptional issues. We just got a S20 for £12,000 for a cavity tray installation needed to fix ingress of water into two of the units. 

Ideally you'd build up the sink fund as you close into big jobs going to need to be done. At our last rental roof need major works, windows replaced and the 8 lifts were being refurbished... quote for the scaffolding alone was over £1m (for the whole site)

Was in the solicitors questions to our sellers on S20 and other communications from the freeholder.

tacpot12

Have you had a survey done on the building? A survey is the best way to figure out the scale of any future building work that might be needed. I own an leasehold flat in a council-owned block. I've had two S20 notices in ten years, one cost me about £800 and the other about £2200. My council has been pretty good about the works, and responded when I queried the costs during one of the consultation periods.  

xdulciex

Thanks @DullGreyGuy - yes the 100k would be my share of a larger bill. The flat is in a period terrace and works listed did include: scaffolding, painting, roof, windows, guttering, investigating asbestos etc. 
Interesting to know that there’s a possibility of frequent s20s. Definitely something to think about!

xdulciex

Thanks @tacpot12 - sounds like a survey would be a good way to try and scope the scale of any future issues, but that there are no guarantees! 

I would hope that such a large bill would cover most issues, as it seems from the experience of others to be far above average cost of a s20! Wonder whether there’s a legal limit on what a freeholder can ask for 🤔 

Jonboy_1984

No limit as such, but you do have the option to appeal at a tribunal if they are excessive or not in accordance with your lease (e.g. for improvements rather than repairs being a common one).

Local authorities do have a reputation for overly expensive demands for gold plated work, as they often still own a number of the properties and are spending tax payers monopoly money rather than their own.

eddddy

In many ways, estimating future section 20  costs is a similar process to looking at a house you want to buy and wondering "I wonder how much I'll need to spend on repairs and maintenance in the next 2, 3, 5 or 10 years?".

Some things might be fairly obvious to the 'untrained eye' for flats, for example:

• Are the window frames rotten? Are they 'fancy' sash windows (maybe in a conservation area)?

• Are the garden fences falling down? Are the path / steps to the front door crumbling?

• Will the communal area need redecorating soon? Will the carpet in the communal area need replacing soon?

• Does the roof look 'wonky' with old broken tiles? Or does it look like it's been recently replaced?

More generally...

• A modern purpose built block of flats is usually cheaper to maintain and repair than an old converted Victorian house

• A building that has been poorly maintained in the past is likely to have bigger repair bills that one which has been well maintained

If you want, you can instruct a surveyor to give you a report on the general condition of the building, and highlighting anything that looks like it might have a large repair cost in the near future.


Also... most 'private sector' leases don't allow the freeholder to decide to implement 'improvements' and then make leaseholders pay for them. But some Council leases do allow that. So maybe check the lease. 


(But I guess that has plusses and minuses. Leaseholders might want improvements, and be happy to pay for them - like installing a video entry system; upgrading communal area floors from lino to carpet; upgrading the communal front door to a panelled hardwood door with brass fixings; installing a secure bike parking shelter; etc.)