Buying a flat with a Section 20 notice on it

Ybe

Would you put in an offer on a leasehold flat which needs some work being dated and also has a section 20 notice on it to do about 10k worth of work to the building?  To be fair the estate agent is being upfront about this which I appreciate. 

pinkshoes

If the EA is being upfront about this and your own searches tally with the £10k (per flat??) that it will cost to rectify the issue, and you have sufficient funds to update the flat, then it wouldn't put me off. 

Ybe

pinkshoes said:

If the EA is being upfront about this and your own searches tally with the £10k (per flat??) that it will cost to rectify the issue, and you have sufficient funds to update the flat, then it wouldn't put me off. 

10k is an estimate though so it could easily become 20k. 

GDB2222

Ybe said:

pinkshoes said:

If the EA is being upfront about this and your own searches tally with the £10k (per flat??) that it will cost to rectify the issue, and you have sufficient funds to update the flat, then it wouldn't put me off. 

10k is an estimate though so it could easily become 20k. 

Do you have £20k, then? 

eddddy

Ybe said:

10k is an estimate though so it could easily become 20k. 

What type of work is it? 

• Is it something unpredictable - for example, that starts with an investigation to find out how bad a problem is?

• Or is it something predictable - for example, like replacing carpets and re-painting the walls in the communal areas?

In general, there's no benefit to Freeholders/Management Companies' in purposely underestimating costs. It just makes life difficult for them, if they have to stop the work and ask the leaseholders for more money.



If you don't have £10k (or £20k) in ready cash - you could ask the seller to deal with it as a £10k (or £20k) retention - if your mortgage lender agrees.

And you probably can't be sure when the bill is going to arrive - before completion (so the seller has to pay it) or after completion (so you have to pay it). So you'll have to make the contract flexible, to deal with either possibility.

DullGreyGuy

Your share of the bill would be £10k or that is the total cost and each flat will be paying their share?

Does the issue directly impact your unit or is it a general building issue with no direct issue to your potential unit?

Nature of home ownership is you will at times get big bills, the only difference with leasehold is you dont get the choice when the work is done. In principle no issue buying a property with a notice on it as long as the price reflects it. Some will ask the vendor to put some money aside to cover any overrun which comes to you if the costs are higher or goes back to them if the repairs are inline with budget.

AlexMac

I agree the above but despite your belief that; “the estate agent is being upfront about this” you can’t take anything the EA says as reliable until your solicitor gets the vendor’s lawyer’s written responses to pre-sale enquiries. 

I assume it’s fairly obvious whether you’re buying into a new development, a large or small estate, with or without potentially expensive features like landscaping, access roads, concierge services, lifts and extensive common areas; conventional construction and pitched roofs or system-built with cladding, flat or sedum roofs? Or is it a period conversion of a single house or mansion? All of which impact on maintenance cost and service charges. 

I’d also be interested in who the freeholder is, type of tenure, how the block or estate is maintained and managed and by who, what the service-charges are and whether these help build a “sinking fund” to help with future cyclical maintenance like external decs or roof repairs?

Is it a “shared freehold” with a non-profit Freehold Company under the leaseholders control, or a profit-driven absentee Freeholder; and if there’s a Managing Agent, are they competent, honest, cost-effective and responsive?

I’ve been happiest owning and living in a couple of past “shared freehold” flats in six-unit early Victorian conversions where we self-managed; high standards of repair and maintenance, very low service charges and healthy sinking funds. 

I’m almost equally happy with the Local Council as freeholder of a couple of BTL flats we own in smallish 50-60 year old blocks of traditional construction with no lifts; annual Service Charges of £1k -£1.5k plus one-offs around £5k every 8-10 years for external devs or window replacement. 

But mates of mine were lucky to offload their fancy two-bedder in a new estate before service charges topped £6k pa or more. And riverside blocks near me are having their leaky, so called “green turf roofs” repaired for the forth or fifth time at who knows what cost!

as I said, you won’t necessarily get answers on these from the EA but you can nose about. I walked away from one flat when I discovers, after a bit of research, that the Freeholder had fought off a “ Right to Mange” attempt by disgruntled leasehold flat owners. 

Good luck 

Ybe

AlexMac said:

I agree the above but despite your belief that; “the estate agent is being upfront about this” you can’t take anything the EA says as reliable until your solicitor gets the vendor’s lawyer’s written responses to pre-sale enquiries. 

I assume it’s fairly obvious whether you’re buying into a new development, a large or small estate, with or without potentially expensive features like landscaping, access roads, concierge services, lifts and extensive common areas; conventional construction and pitched roofs or system-built with cladding, flat or sedum roofs? Or is it a period conversion of a single house or mansion? All of which impact on maintenance cost and service charges. 

I’d also be interested in who the freeholder is, type of tenure, how the block or estate is maintained and managed and by who, what the service-charges are and whether these help build a “sinking fund” to help with future cyclical maintenance like external decs or roof repairs?

Is it a “shared freehold” with a non-profit Freehold Company under the leaseholders control, or a profit-driven absentee Freeholder; and if there’s a Managing Agent, are they competent, honest, cost-effective and responsive?

I’ve been happiest owning and living in a couple of past “shared freehold” flats in six-unit early Victorian conversions where we self-managed; high standards of repair and maintenance, very low service charges and healthy sinking funds. 

I’m almost equally happy with the Local Council as freeholder of a couple of BTL flats we own in smallish 50-60 year old blocks of traditional construction with no lifts; annual Service Charges of £1k -£1.5k plus one-offs around £5k every 8-10 years for external devs or window replacement. 

But mates of mine were lucky to offload their fancy two-bedder in a new estate before service charges topped £6k pa or more. And riverside blocks near me are having their leaky, so called “green turf roofs” repaired for the forth or fifth time at who knows what cost!

as I said, you won’t necessarily get answers on these from the EA but you can nose about. I walked away from one flat when I discovers, after a bit of research, that the Freeholder had fought off a “ Right to Mange” attempt by disgruntled leasehold flat owners. 

Good luck 

Thanks for this. What really worried me was the state of the communal areas (cables hanging out of ducts and troughs, electrical cabinets left open, damaged plastering. I can see why the building needs work but makes me think how it got to that state in the first place.