Rider

ahfat41

The flat has been issued with a section 20 and seller has agreed to pay for the costs. The sellers solicitor mentioned a rider. How will this work if when work is completed it will cost more, can I ask the seller will be responsible for the extra cost in the rider? Who will hold the retention money, is it the buyer solicitor. Am aware will get all these answers from my solicitor but am wondering if any of you has had experience with rider. Thanks

Tiglet2

Are you the buyer? 

If there is to be a retention of a sum of money, this will be held by the seller's solicitor.  The rider will set out the 'rules', i.e. how much is to be retained and for how long.  The rider will need to be agreed by both parties.  The rider will be attached to the contract. 

You would need evidence of the work and cost to be able to claim all or part of the retention before the date specified on the rider. If there is any money left over, it will be returned to the seller.  However, the yearly final accounts from the management company will need to be published before any money is paid out by the seller's solicitor, so make sure you send the final accounts to your solicitor as soon as you receive them.

eddddy

With a private sector freeholder, the section 20 / major works process would often go something like this:

• 1. The freeholder informs leaseholders of their intention to do works (and invites comments)  - and provides a description of the work to be done. 

• 2. The freeholder requests quotes from (at least 2) suitable contractors

• 3. The freeholder sends copies of all the quotes received to the leaseholders (and invites comments)

• 4. The freeholder picks the 'best' quote

• 5. The freeholder sends out a service charge bill to each leaseholder, requesting payment of their share

• 6. Once the freeholder has all the payments from the leaseholders, the work starts.

So once you reach point 3 above, you should have a clear idea of what the cost will be.

If a seller's solicitor keeps a retention, I guess the agreement would be that the seller's solicitor pays the bill when it arrives at point 5 above.


The quotes should be fixed (and not increase), based on the description of work that the freeholder described in point 1.  But for example, the quotes could be expressed in these types of ways:

• £20k or
• £20k + 15% contingency allowance (i.e. up to £3k could be added if problems arise) or
• £20k for replacement of the doors + £6k if its found that the lintels need replacing

But if new work is required, which wasn't described in point 1, then that would be an extra cost and a new section 20 consultation might be required.



But I believe your freeholder would be a council - so they might do things a bit differently. You'd need to ask them.