My solicitor refused to draw up a retention rider for S20 work

mizukashano

I am currently in the process of buying a leasehold flat in London (freeholder is not the local authority). Unfortunately, it's stated in the management pack that there will be the much dreaded S20 work in the next two years which involves external redecoration and there will be an increase in service charge. However, the notice has not been served yet, hence the management company has not been able to provide the quotes or estimated costs. I have been trying to at least get a more detailed list of the work that will be undertaken.

Since it is rather vague in terms of the cost and the work, I did not ask for a reduction in price from the seller and instead pursue a retention to cover myself should such work arise in the coming year.

I have raised this to my solicitor, hoping that they will draw up a retention rider and raise it with the seller's solicitor. However, my solicitor have flat out rejected my request, citing that I have no grounds to ask for a retention when the work has not been scheduled and no details have been provided from the management company, and that I should accept that any future work and cost will be at my own risk, should I decide to go forward with the purchase.

Any advice is appreciated as it sounds to me that my solicitor is just not willing to do the extra work. Is it unreasonable for me to request for a retention, and that I should just negotiate for a lower price instead?

Hoenir

Perhaps your vendor won't agree to the proposed retention amount or your lower offer.............

user1977

A retention is always a messy "solution", especially when nobody is certain what the cost will be or when the works are going to be done. Solicitors don't want to be babysitting the money years after the transaction is done.

sheramber

Since it is rather vague in terms of the cost and the work, I did not ask for a reduction in price from the seller and instead pursue a retention to cover myself should such work arise in the coming year.

Why is a retention less massy than a reduced purchase price?

How did you arrive at a  figure of £20k?

mizukashano

sheramber said:

Since it is rather vague in terms of the cost and the work, I did not ask for a reduction in price from the seller and instead pursue a retention to cover myself should such work arise in the coming year.

Why is a retention less massy than a reduced purchase price?

How did you arrive at a  figure of £20k?

I have not surface a figure yet to my solicitor but I was thinking around £5k potentially (£20k split amongst 4 leaseholders), assuming that repainting and repointing of brickwork, other repairs to the external of the building, scaffolding etc. are required.

I am very new to the whole homebuying process, but I thought a retention might be more favourable for the seller reason being that the cost of the work is unclear, if the cost of the future work is less than the amount retained, at least they will be getting back the difference. 

saajan_12

Are you expecting that the solicitor do it within the fee quoted for the purchase? Due to the vague nature of potential works, any retention rider would be harder to draft -

- would it cover any works in the next x years or specify works related to redecoration? 
- what if they end up just doing a small paint job for the particularly messy area and its cheap enough to not need a s20.. does that count under the retention or not? 
- what if they find a major structural issue later and do the redecoration while they're at it is that in scope or out of scpe or a %? 
- ...

So the solicitor may argue that's not within the scope of any fixed fee arrangement. You could ask again what their fee would be for drafting such a rider, at their hourly rate - or they may say its not part of what they can do if they just process run of the mill conveyancing. 

saajan_12

mizukashano said:

sheramber said:

Since it is rather vague in terms of the cost and the work, I did not ask for a reduction in price from the seller and instead pursue a retention to cover myself should such work arise in the coming year.

Why is a retention less massy than a reduced purchase price?

How did you arrive at a  figure of £20k?

I have not surface a figure yet to my solicitor but I was thinking around £5k potentially (£20k split amongst 4 leaseholders), assuming that repainting and repointing of brickwork, other repairs to the external of the building, scaffolding etc. are required.

I am very new to the whole homebuying process, but I thought a retention might be more favourable for the seller reason being that the cost of the work is unclear, if the cost of the future work is less than the amount retained, at least they will be getting back the difference. 

What's that as a % of the property value? Even if the cost of the works was £5k per flat, you'd struggle to negotiate the seller paying all of that, since its partly just normal maintenance rather than an existing defect and you'd be getting the benefit of a new shiny decoration. So you're looking at £2-3k.. is it really worth it? 

user1977

saajan_12 said:

mizukashano said:

sheramber said:

Since it is rather vague in terms of the cost and the work, I did not ask for a reduction in price from the seller and instead pursue a retention to cover myself should such work arise in the coming year.

Why is a retention less massy than a reduced purchase price?

How did you arrive at a  figure of £20k?

I have not surface a figure yet to my solicitor but I was thinking around £5k potentially (£20k split amongst 4 leaseholders), assuming that repainting and repointing of brickwork, other repairs to the external of the building, scaffolding etc. are required.

I am very new to the whole homebuying process, but I thought a retention might be more favourable for the seller reason being that the cost of the work is unclear, if the cost of the future work is less than the amount retained, at least they will be getting back the difference. 

What's that as a % of the property value? Even if the cost of the works was £5k per flat, you'd struggle to negotiate the seller paying all of that, since its partly just normal maintenance rather than an existing defect and you'd be getting the benefit of a new shiny decoration. So you're looking at £2-3k.. is it really worth it? 

Quite. If you were buying a house and thought you might be redecorating it within a couple of years, you wouldn't literally be calculating the cost of the decoration and deducting it from the price.