Buy a Flat with section 20 started 2020, completed 2023, bill not issued.

SoNyz85

Hello Everyone,

I am at the final stage to buy a flat, ex council flats, however, there is something that doesn’t make me feel comfortable to go head.

In 2020 there was a section 20, works completed in 2022 and the estimate amount to pay is £22.500 each, there are 8 flats, the bills haven’t been issued yet, and that’s weird as what the council is waiting for? How is possible that the bill hasn’t been issued after 3 years? However, forgetting about this, my biggest frustration is, talking to my solicitor, she is not helpful at all as I asked many times if buying this property not knowing the date of the bill when it will be issued, how can I be sure that this bills will be paid by the seller? Solicitor said that there is not indemnity insurance to cover section 20 works but this will be attached to the contract and once we have exchanged, this form will be part of the contract which is legally binding.

NOW, my question is: (unfortunately the solicitor turn words around without saying yes or no)

Am I 100% covered from this bill?

Can the seller do something doggy and not pay for the bill that will fall on me?

I want to go head only if this is 100% sure, I don’t trust anybody and I want to be sure that once the exchange has been done, the bill will never reach my name.

Thanks in advance for the answers

tacpot12

The obvious answer seems to be to reduce the price of the flat by the size of the bill if it hasn't arrived when contracts are exchanged. Completing on the same days as the exchange of contracts might also be necessary to avoid any period when the destination of the bill is unclear. 

loubel

You mention it being added to the contract, so do you mean that there is a rider to add a retention to cover this bill? That would be the usual way to deal with this. One of the solicitors holds onto the sum anticipated for the bill for a set amount of time and then releases this to pay the bill once issued. 

eddddy

loubel said:

You mention it being added to the contract, so do you mean that there is a rider to add a retention to cover this bill? That would be the usual way to deal with this. One of the solicitors holds onto the sum anticipated for the bill for a set amount of time and then releases this to pay the bill once issued. 

I guess the issue is what 'set amount of time'?  The freeholder (council?) seems to have waited 3 years so far.


@SoNyz85 - have the council given any indication of why they haven't demanded the service charge within the last 3 years, and/or when they might eventually send out the bill?

Even then, they might estimate that the bill will be sent out within the next 6 months - but then it takes 12 months or 18 months or whatever.


(There are laws about time limits for sending out service charge bills, but it gets a bit complex - and it might take a tribunal to decide whether the law has been adhered to.)