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Hello - thanks for your replies.
As it's a flat I only got a Homebuyer Report. Really? You might want to rethink that under the circumstances.
My surveyor generally did not have concerns. Of course he didn't. His liability under this type of survey is minimal.
But of course the roof is not visible from the ground. So you cannot even begin to assess it's condition.
I didn't notice anything terrible about the communal areas or any of the outside areas. These areas probably carry the least risk of big expense.
But neither did things look brand spanking new.
It is not obviously in a very poor state. Many expensive problems can be hidden from view.
But there is only so much you can see when the Homebuyer Report is restricted in what it looks at, as I'm sure you realise.
In my opinion, it would be prudent to have a more thorough survey done. A homebuyers report is as basic as it gets and, in many cases, only really serves to assure the lender that the property is worth what they are lending against it.
It is an older building do will be subject to maintenance expense from time to time. You need to negate the risk that big expenses are imminent - particularly if such expenses will stress your finances.0 -
In my opinion, it would be prudent to have a more thorough survey done. A homebuyers report is as basic as it gets and, in many cases, only really serves to assure the lender that the property is worth what they are lending against it.
It is an older building do will be subject to maintenance expense from time to time. You need to negate the risk that big expenses are imminent - particularly if such expenses will stress your finances.
Thanks - I actually was willing to pay for a full structural survey, but the surveyor said that with flats it was hard getting access to certain areas (e.g. other flats), so he'd only do a Homebuyer Report.
Are there surveyors willing to do full structural surveys when you are buying a leasehold flat?
Yes, I can see that there is a definite risk of a large bill imminently.
Even under £10K I could handle with a loan, but no more.0 -
Several years ago, a very good friend of mine bought a victorian converted flat and they were told about the upcoming major repairs/maintenance bill when viewing the property. They negotiated the to add 2/3 of the bill on top of their offer price and they would not be responsible for further costs/responsibility for the proposed work.
They then took a building survey which revealed further necessary repair works after the proposed work so they negotiated the offer price accordingly in the middle of conveyancing.
Seller was desperate because he didn't have money to pay for the maintenance/repair works.
If you can find out how much works are needed and how urgent are they, then perhaps you can work out if you can afford it or should renegotiate the offer.0 -
A sinking fund is really not much more than a savings account. The leaseholders pay a bit into it each month, and when there's smaller bills, they just come out of there instead of being passed on.
Large bills are still going to be passed on, unless the sinking fund is substantial (which is only going to happen if a lot has been paid into it...)
The building needs whatever work the building needs, and that's got to be paid for by the leaseholders.0 -
Hello all - thanks for further thoughtful replies.
Yes, I think I need to know what the works are and the likely bill before proceeding to exchange.
That way I can renegotiate if necessary.
What might be more efficient than getting my own structural survey is simply waiting for the freeholder to say what the intended works are and the cost.
I definitely appreciate that paying for such works is the responsibility of a leaseholder.
In fact, with no sinking fund I would be happy to set up my own separate account instead.
But I am asking myself if I want to become a leaseholder in this property at *this* point in the building's history... after what sounds like years of a lax freeholder approach followed by a sudden transition to a zealous one.
Sadly, it could even be time to walk away.0 -
And although the seller has shown signs of desperation, he definitely has more money than me to hand, as demonstrated by his recent attempt to buy the entire freehold.0
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A sinking fund is really not much more than a savings account. The leaseholders pay a bit into it each month, and when there's smaller bills, they just come out of there instead of being passed on.
Large bills are still going to be passed on, unless the sinking fund is substantial (which is only going to happen if a lot has been paid into it...)
The building needs whatever work the building needs, and that's got to be paid for by the leaseholders.
Incorrect.
A sinking fund is a long term savings pot which is required to pay for significant costs which accrue over many years. For example replacement of a lift, reroofing, rewiring, upgrades required due to changes in legislation etc etc
They are used for two reasons:
It reduces the building owners risk of not having the money in an emergency and not being able to get it off everyone in a timely fashion. Occupiers may not be in a position to pay a large bill without spreading payments, but may not be credit worthy.
It ensures everyone who lives in the property contributes to long term maintenance, even if they move out before the work is required.
Typical ongoing maintenance costs should be paid out of the annual service charge, not the sinking fund.
I would be reluctant to purchase a leasehold property of significant age without knowing a sinking fund was in place.0 -
Seems to me the timing is unfortunate. The seller is a bit stuck and I can understand you wanting to wait and see what sort of bill you're likely to be in for.
Some management companies have a reputation for bleeding their leaseholders dry so a quick Google could be worthwhile. However it's not a definite that you'll be faced with an enormous bill. You just don't know right now.
Something similar has happened in a building I'm a leaseholder in. Two flats had buyers in October. One completed and the following week we all had a letter regarding works to the building ... The other buyer ended up pulling out due to the uncertainty, but it's now about to exchange again (we now have a much better idea how much is going to be due and it is only about £2000 per flat so not going to break the bank)
You can either wait and see what comes up (who knows how long that'll take, and the seller might not be able to hang around for you to decide)
Spend £1000 on a survey which may be incomplete if they cannot access all areas of the building
Go ahead and risk a big expense. (Divided between the 5 flats)
If you are genuinely cash strapped I think you might pull out of this one.0 -
You can either wait and see what comes up (who knows how long that'll take, and the seller might not be able to hang around for you to decide)
Spend £1000 on a survey which may be incomplete if they cannot access all areas of the building
Go ahead and risk a big expense. (Divided between the 5 flats)
Cheers!
I have emailed my conveyancer asking her to find out the nature of the works and the likely costs. Without this info I definitely won't exchange. And if I don't get the info fairly quickly, I'll pull out.
In theory I'd pay for a structural survey but a) will the surveyor actually access the necessary areas? b) will the freeholder's desired works bear any resemblance to a surveyor's recommendations?
Risking a big expense: as I say, I can do £1K without a loan; and up to £10K with a loan. Just saving the deposit has almost wiped out my savings, though achieving it has been a testament to the power of frugality. If they want a larger amount of money, I can't do it.
As for Googling the management company, absolutely! There is no dirt on them online, which is good. I always google everyone involved in a property transaction. Once I found that a potential freeholder had been up in court for connecting his tenants illegally to a public water supply; and their sewerage system consisted of a noncompliant pumping station. Google everyone!0
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