Flat purchase- LPE1 shows works in 2025, no S20 served

doublewobble

Hi everyone. My apologies if not posted in the right place.

Looking to purchase a leasehold flat(southwest area) in a building of 4 flats(2 up, 2 down). Freeholder is a housing association. 

The LPE1 question 4.8 says : "in the next 2 years are there any section 20 works above £250?"

Freeholder answer to that was: "cyclical decoration,  replacement of rainwater goods and repair of soffits/fascias due 2025, work had not been yet tendered or surveyed"

Now solicitor asked if S20 proceedings have started, and answer was no, therefore leaseholder(seller) was not informed.

Now, it's obvious some sort of work will take place and I'll have to foot the bill if I go ahead with the purchase.
Question is, how/can I ask the seller yo pay for it, or at least part of it?

Thank you very much

ps can post more details if needed

eddddy

If you think it's appropriate, the easiest thing might be to reduce your offer - and give this as a reason.

The other approach might be to ask for a retention (i.e. the solicitor holds some of purchase  money to pay towards this), but given the uncertainty of what the work is and when it will be done, maybe that's not ideal.

doublewobble

Thank you Edddy. Asked solicitor about retainer before, and solicitor said we could do a 12 months one.

Altough, solicitor said because s20 procedures haven't started yet,  seller could turn around and say no to any payment..then what?

Asked the surveyor, who responded that he didn't see any work doing, but shouldn't cost more than £3,000 as my share.

Now surveyor might be well intended but how much can I trust this, he also mistaken the wooden floors for concrete ones in his report(because carpets were fitted in every room)

user1977

Retentions are a messy "solution" for something where nobody knows what the cost will be or when it's going to be done. At some point you need to accept there'll be regular maintenance etc going on, you pay for the property in its current condition. Simpler to adjust the price, if that's appropriate.

doublewobble

Thank you user 1977. Thought about it too.
I do accept that there will be maintenance, just because it's so soon and no price mentioned, the k perhaps it should be reflected  down from the offered price.

Also the freeholder(HA) have told me via email, that in 2028/2029 there will be roof replacement works.

There's no sinking fund, and service charge and ground rent are very low.

Cyclical redecoration is done every 7 years or as freeholder mentioned as and when required  Issue wad when inquired via solicitor, that they didn't have any records past 7 years, and also no maintenance shows within last 7 years. Saying this, the building looks in a good state, as surveyor mentioned as well.

What would you guys do, proceed or stop the buying? 

Tiglet2

doublewobble said:

Thank you user 1977. Thought about it too.
I do accept that there will be maintenance, just because it's so soon and no price mentioned, the k perhaps it should be reflected  down from the offered price.

Also the freeholder(HA) have told me via email, that in 2028/2029 there will be roof replacement works.

There's no sinking fund, and service charge and ground rent are very low.

Cyclical redecoration is done every 7 years or as freeholder mentioned as and when required  Issue wad when inquired via solicitor, that they didn't have any records past 7 years, and also no maintenance shows within last 7 years. Saying this, the building looks in a good state, as surveyor mentioned as well.

What would you guys do, proceed or stop the buying? 

Perhaps one way of looking at it is that all properties need maintenance.  So, whatever you buy, general maintenance is a necessary part of home ownership.

If you bought a freehold house you would need to keep on top of general maintenance and pay for any necessary works as and when they crop up, according to how much of a priority it is and your budget.

If you buy a leasehold apartment, the freeholder has the responsibility of maintaining the building/communal areas  and they may employ a managing agent to oversee it.  All leaseholders would share the costs of this maintenance.  Having a cyclical programme is a sensible way of keeping the property in a good state of repair, though you would need to budget as the cyclical programme could be at any time, which may or may not suit your finances. 

The works in 2025 have not yet been tendered or S20 Notices issued, so the works could still be a year away or so.  Of course, the 2028/2029 works benefit you, not your seller.   You state that the service charge is low, with no sinking fund, hence why S20 Notices are issued for larger works. 

A cyclical arrangement every 7 years is reasonable.  My son's apartment block is exactly the same and I would say it is far nicer to live in a well maintained block than one that isn't.

LHCalc123

I agree with the others. As there will be no benefit of the works for the current LH, I don't think a retention or reduction is appropriate here.

doublewobble

Thank you for your replies Tigket and LHC.

I understand tour point of view and somehow agree up to a degree.

Expectingly, would pay for maintenance work as and when required.
Altough, these works due next year(which is just Iver 2 months away), and considering none of these "cyclical" works have been done in the past 7 years, isn't this the responsibility of the actual seller?

The seller had this property for 2 years, and if I was to give up now, surely another buyer will pick up on the same thing?

On a freehold in my area you could replace one roof side of a 2/3 bed house for £5,000-£7,000, and both sides for £12,000.
Would pri e be the same for a leasehold flat, namely this one?

This is all I'm asking:
- will cyclical for 2025 be £2k-3k or more likely upwards to £10k or even more?
- what about the roof up to £15,000 or much more
As I've read some £30,000 to £50,000 stories on this forum and some others like reddit

eddddy

FWIW, I'm not sure I agree with the justification that the seller gets no benefit from the maintenance/repairs...

If I were looking at 2 properties (whether it's a leasehold flat, or freehold house) ...

• 1) is in poorer condition - it will need redecoration, replacement of rainwater goods and repair of soffits/fascias within a year or so, and a new roof in 4 or 5 years
  

• 2) is in better condition - no foreseeable replacement of rainwater goods or repair of soffits/fascias, and unlikely to need a new roof for very many years

I would expect to pay less for property 1, because of the poorer condition and upcoming costs.

And/or if I didn't know about the poor condition of the rainwater goods, soffits/fascias and roof when I made my offer, I think I'd feel justified in reducing my offer when I found out.


The argument that I shouldn't pay less because it's me that will get the benefit of the new rainwater goods, soffits/fascias and roof doesn't seem logical.

(I guess the counter argument is that the seller has had the benefit of not having had to pay for new rainwater goods, soffits/fascias and roof in recent years - so the consequence is that they will have to accept a reduced price.)

NameUnavailable

If you still want to proceed revise your offer to an amount you're happy with. The vendor may refuse however but will likely face the same issue with another buyer.

Until estimates have been obtained nobody can advise you on costs - you mentioned that the freeholder is a HA, they tend to use larger contractors for works (i.e. more expensive than the local van and man builder). However they often also offer options to pay for works over a period of months, maybe speak to them about this to find out now.

As already said, every property will need money spending on it, service charges usually only cover routine stuff like cleaning/gardening/insurance and lighting.

doublewobble

Thank you Edddy and NameUnavailable.

Tried to speak to HA, and solicitor tried to.
They’ve answered, but no quotes were given. Asked for brackets amounts £1,000-£5,000 or £5,000-£10,000 and so on. They didn’t budge.

Although they have many identical building, I understand they don’t want to give “false” information.

Also asked about an external stairwell/steps that was given a condition rating 2 by surveyor, without result. About this they even said, that recently have completed works to another flat with identical stairwell.

So many things and such little info I could gather from freeholder; although they seem to be approachable enough, no figures whatsoever have been given.

I wanted this to be the right place, because freeholds are so expensive. 

For freeholds, either I’m priced out or just at top end of my affordability-which don’t  feel very comfortable about.