So frustrated!! And need advice asap

[Kat256M]

A bit of background, I am buying a high rise flat at the moment. Process is dragging, flat still tenanted with no notice given and more importantly I just officially found out they will get a section 20 served next year for 10k+ redecoration costs. I already knew from another flat that went for sale there(that seller was more honest but was looking for cash buyers), asked for a price reduction and they denied everything to their EA. They knew nothing about costs and think their price is great. But it is now on the management packthat my solicitor sent me! Still it doesn't look like they will reduce the price.

Now. When they denied (falsely) the upcoming fees we started looking at other properties. Now we have another flat that we like and thinking about making an offer. But if we pull out of the first sale we are worried we will get stuck with similar issues (or worse!) when we get to their management pack. And they don't have an EWS1 form so I am worried the mortgage may not go through.

We really need to move to a place of our own during the next year. They won't renew our lease and we have a baby, nobody rents to families if they can avoid it around here. Please don't go into the buying a house vs flat debate, this is best for us.

What can we do? Can we start the process and raise leasehold enquiries with another lawyer for the other property? I know it is dishonest but is it even legal? Will we have issues with the initial mortgage offer if we ask one for a new place? AIBU to even think about doing that before rejecting the first flat? I am a bit panicked and don't know what to do. I just want our family to have a place of out own next year and to not be bankrupt!

You mean the new place you are looking at doesn't have EWS1?
What remedial issues are there?

I am selling a high rise but do have EWS1. I'm aware of others in the area who don't but they only have minor defects. However, the mortgage lender is making a huge mission of the mere fact that it's a high rise so do be aware of that. I imagine the process of buying/selling without EWS1 is pretty full on.

You are allowed to instruct a solicitor to look at more than one if you can pay those bills.

In terms of what the buyer says, sometimes it's that they know zero about their own home, sometimes they are malicious, sometimes all three, but obviously always rely on what paperwork says.

FWIW I have been incredibly happy in a high rise for 14 years and the views are amazing. Plus that sense of being high up and separated from the world.

I wouldn't buy a property with tenants in situ, regardless of any of the other issues you go on to mention. If they refuse to leave then you will wind up a landlord.

That aside, I have sold a flat before that had an upcoming section 20 that we as residents knew nothing about.... our building manager was useless at comms. However it all came out in the management pack and our buyers thought we were trying to hide stuff from them- we genuinely weren't, we just didn't have visibility of the same things they did in the management pack.

Not saying this means you should or shouldn't accept it in your situation, just that the vendors don't always have the full picture themselves!

I believe you can start legal proceedings on another property while still doing it on a separate one, would be very expensive though.

Thank you that is good to know! I was just assuming they are trying to take advantage. Would you expect to lower your asking price when you realised the Section 20 is on the way? Or just it is what it is?

@EmmaEmerald It doesn't have an EWS1 form because it is more than 5 stories tall(6 I think) so they are not required to anymore. I checked with my bank and apparently that is correct, seems weird. I would assume the higher you go the higher the fire risk!

We took some money off in the end to get the sale through- the costs weren't as much as you've said here but we essentially met the buyer in the middle (so contributed half).

There could have been no section 20 planned right up until we sold and then one issued the day after completion which the buyer would have then been on the hook for in its entirety, that's just a risk of flat ownership really- so they were more than happy with half the costs!

Right, so if there's no EWS1 required, I'd cross that off your worry list for that flat.

For the other one, it's £10k divided between flats ....I hope?

In terms of the tenants, do you know why they haven't give notice?

Contractually, they have to give you vacant possession unless they are officially trying to flog you a flat with tenants. It might be they failed to give notice because they think the process will go on for ages but I wouldn't buy in that situation either. Some would, of course.

I nearly offered on a flat where the tenant had vacated already...

Before I offered, I was mulling over what my offer should be, and then the vendor said "is it okay if my mate lives in it for three months". I'm glad he asked, but my answer was no.

Oh no...£10-£15k per flat in the first 6 months of 2024. At least. I think I may need to bite the bullet and pull out of the sale. I can't afford it especially if the buyer doesn't want to lower the price. I am just terrified of suddenly having nowhere to stay.

I think the tenant is still there because they want to have it vacant for as little time as possible so they don't lose out on the rent. I just don't trust them now...just feeling very scared to make a decision in general

That's an awful lot to hand over in one go. I'm guessing the decorating is partially maintenance work etc.

It's certainly off putting. There might be a payment plan?

10k each for redecoration? Crikey.

There are other flats. High rises come with additional costs like that, can you look at smaller blocks?

@EmmaEmerald Yes by "redecorating" the mean scaffolding and doing a lot of work on balconies, roof etc. I got a breakdown from the seller of the other flat. It looks like a lot! Thankfully he is very honest. Might have saved me so much money.

I don't know about payment plans since they haven't actually gotten an official quote from anyone yet. But AIBU to think that they need to lower their price?

FYI the other flat is discounted by 50k! But he wants a cash buyer for a quick sale before the work starts so can't buy that one :(

Ahh ok, that is a lot more than redecoration.

Buying a flat will come with these kinds of costs especially high rise ones. You need to be prepared for this if you are set on buying a flat.

OP "Yes by "redecorating" the mean scaffolding and doing a lot of work on balconies, roof etc. I got a breakdown from the seller of the other flat. It looks like a lot! "

have you looked at the EWS1 form? Has it only been granted on condition of this work being done? Many high rises are in that position.

I would definitely negotiate a lower price but they might then decide to keep renting it out till the work is done.

In a block that's 4 stories, 24 apartments, get bills like that every 5-6 years for redecoration and any remedial work that needs doing.

Really? So you pay £10k-15k every 5 years or so? Do you have to pay them all together?

Shouldn't they have a better reserve fund to cover some work? The service charges are huge (£4200 including ground rent, building insurance and water). I assumed most work would be covered by these unless something unexpected came up

Typically £8-10k last couple of times from memory - I expect it will be higher next time.
Service charge is around £4.5k annually, covers cleaning, insurance, lifts, car park maintenance, communal laundry (I live on the ground floor and don't have a car park space) management fees.
There's never been a reserve fund, unless temporary (work scheduled but happens late)

& yes, has to be paid in a lump sum - there's typically 6-9 months informal notice because they notify of the works and that they're going out to tender.

I suppose if I wanted to build up a reserve of my own, I could overpay the half yearly service charge, or if I needed to budget, open a separate interest bearing account & pay in £150ish a month.

@ThinWomansBrain Sounds very similar to my building without the communal laundry. But yes parking, lifts etc. included. We may live around the same area.Thank for for the response, that is very helpful. Although to be fair from what everyone has told me you should have a reserve fund, especially with such high interest rates!

So you think I am overeacting? You would expect a buyer to pay for all this straight away? I am afraid I am just being naive about the actual costs involved. I sent a long email to the EA with the breakdown of short and long term costs and asked them to be passed on to the seller because I am having doubts about the value of the flat.

I think when I bought (it was a long while ago) I saw service fee and maintenance bills going back for a few years. Ask you solicitor about this, he/she can request the information.

Personally I wouldn't look at buying anything without vacant possession - properties sold with tenants in situ tend to be priced at less than the market rate of a vacant property - as you've seen from the other flat.

@ThinWomansBrain They do say it is vacant possesion because the tenant is in a rolling contract and they will give notice for him to be gone before completion date.

It is more about high rises in general. There is no point in pulling out if I know I will have the same issues with the next flat. I thought that the unexprected (not covered by service charges) costs wouldn't be that common. And that the buyer was taking advantage so she wouldn't have to pay these upcoming ones.

this is my second flat - the first just had minimal ground rent, it was a maisonette, so two properties, no communal areas, service charge might have been the buildings insurance, but minimal.

I live in central London - the service charges aren't unusual compared to similar properties in the area.
The only way a reserve charge would build up is if we paid higher service fees - there was talk of it when we changed the managing agents a few years ago, but the original managing agents had been a bit lax (although not much cheaper) so a lot of remedial work was needed, and the idea of building a reserve fund got dropped.

I think it's given you a good idea of what to ask when looking at other properties - service charge, any work for bills in addition to regular service charge.
THe owners will receive annual accounts - ask to see those, and it will indicate any reserve fund.

@Kat256M Different blocks will have different levels of service charges and different major repairs costs. High rises tend to be on the high side for both - especially if they have communal services like heating or a concierge.

I live in low ish (4 floors) rise thirties block. We pay £3000 a year and that includes gardening, communal electricity, lift maintenance, insurance, cleaning, ongoing repairs (anything that costs up to £250 per flat), a contribution to the sinking fund for bigger jobs.

I have only had to pay one lump of major works since I bought in 2015 and that was a £2000 contribution to fire safety works (repalcement of fire doors, new ceilings in communal areas and various fire proofing jobs) but we are probably due a big lump of contributions for some major external redecoration in the next couple of years.

If you own a flat you need to factor that in to your personal maintainance budget allocations.

In terms of your question, YANB to revise you offer in the light of new information about upcoming major works costs. But equally your vendor is within their rights to refuse a lower offer. It all comes down to negotiation. I'd do it sooner rather than later though. No one likes a gazunderer.

Also that stuff about the tenant is bullshit - regardless of a fixed or rolling contract the only parties that can legally end a tenancy is the tenant themselves or the courts. The landlord can give notice but if the tenant choses not to leave then it can take a while to evict them. Insist on vacant possession as a condition of excahnge - that way the vendor bears the risk for the tenant not vacating.

They should pay half the expected cost for the redecoration. They should definitely give notice to the tenants and I wouldn't even exchange on it til the tenants moved out.
As for the other flat - your solicitor doesn't care as you will have to pay their fees whether you complete the purchase or not.

It could be that your tenant is in the same position as me, I was presented with an upcoming bill for major works in my 1930s 4 storey block in Brighton about 15 years ago. It was 35k and I couldn't afford it or borrow it. I was divorcing and all my cards were maxed out. It was more than my annual salary. I had to sell the flat, but the difference was I was upfront about the bill and priced it to sell. I had doubled my money in a short time frame so it was ok to discount. If your vendor is selling because of the bill the economy is very different now they may not have wiggle room.

@mondaytosunday When you say they should pay half do you mean cash or discount the house of the flat? I am waiting to hear back from them but I don't see them renegotiating

@Doggymummar Yes if they were honest and discounted the price (like the other seller) it would be different...it is a Buy to Let property for them and I don't think they are in need of the money. Greedy more than anything. At least this is what comes across.