Leasehold and major repairs

Shazza700

I am about to exchange contacts on a 2 bed flat in a block of 17 flats.  I have just had a letter from the management company informing me that the roof of the block needs to be replaced in 2 years.  I am unsure how to proceed and how to get the information I need.  I don’t want to be faced with a large bill.  How can I find out how much this is going to cost me?

itsthelittlethings

You may be faced with a large bill. You can ask them but they will have to issue a section 20 for the work and may not be able to give you any idea of how much it will be before that.

Shazza700

I am tempted to pull out of the process and start again.

fullyrendered

Is there a sinking fund? How much is in it and how much would you be expected to contribute each year?

Is the freeholder private or a local authority/housing association?

How big is the roof? Is it flat or pitched?

Did you have your own survey carried out and get any advice on this issue?

Marvel1

I would get a hold of your solicitor asap before you exchange and ask about this.

Shazza700

fullyrendered said:

Is there a sinking fund? How much is in it and how much would you be expected to contribute each year?

Is the freeholder private or a local authority/housing association?

How big is the roof? Is it flat or pitched?

Did you have your own survey carried out and get any advice on this issue?

This is the building.  17 flats in all.  It’s actually my son who’s purchasing the flat.  I don’t think there will be a sink fund to cover the work.  He may
face a huge bill.

Shazza700

Service charge is £2k a year
he just had a basic survey done

Tabieth

I’d want a lot more info from my solicitor before I went ahead. 

fullyrendered

You/he needs to read the freeholder's response to solicitor's enquiries, the LPE1 which will tell you about any sinking fund.

Could it be the seller knew this work was coming, and this is a reason for selling. If the offer was made without knowledge of such significant work he might want to revise his offer, especially if there is no sinking fund.

The image of the building above is only about a third of the whole building, that's a lot of roof to replace. The local authority (BANES) will also be fussy about the materials used as it sits in central Bath.

17 flats @£10k each gives them £170k to spend, could be more than double that though.

If he goes ahead with the purchase he needs to know how he'll fund this work, in advance of it being done. Would a price reduction leave funds in savings for example?

Better to know beforehand!

Shazza700

That is very helpful and I appreciate your advice.  I will definitely advise my son to renegotiate with the  vendor.  There was no prior indication that this work was due to take place and I am fairly sure that the vendor would have had knowledge .  Will also get the solicitor to check the LPE1.