Selling with a Section 20 - what will a lender say?

[WiseCrab]

Hi there,
I'm putting my flat on the market but I know there is a section 20 coming soon. The work has been scoped and put out to tender, and the costs apportioned by a solicitor (not all of the properties in the block are the same). The share for my flat is looking like around £10k. It's for new windows, and repair to the render on the outside of the building. This uses some, but not all, of the reserve funds from the service charge. We'll also have an extra 6 8-12 months of reserve funds in the service charge by the time the works take place. I have a buyer, and we've agreed on a price based on the bill. They have a hefty deposit, but I'm nervous about whether a lender will lend. Does anyone have any experience of this, or any advice?

Most lenders will lend where there is a section 20 and there is a coherent financial plan for the spend and effectively funds are available. ( may not be as keen where there is no financial plan in place)

The buyers solicitors will also look at the section 20 and finances of the block to advise whether the buyer should proceed or not. The scenario you are articulating shouldn't cause any concern as funds are available for the work and they have been factored into the sale price.

I stepped away from a couple of flats when helping my nephew buy his first flat because section 20s had been issued but funds weren't available in the reserves and flat holders were going to have to foot the full bill.

I've sold one flat that was much less organised in that the S20 was issued after I'd accepted an offer but no reserve funds available and no timelines. The buyers wanted a reduction in price but their mortgage company wouldn't do a revaluation (I can't remember why). My estate agent was also clear that the flat was fairly priced and the works would benefit the buyers etc.
But I didn't want to lose the sale so I essentially gave them about 50% of my contribution of the cost of works in cash - about £3k. The solicitor also held another £1k of my sale money for 6 months in case anything came up (as the freeholder only had partial quotes). It didn't and I got it back.

Getting the estate agent and solicitor onside and them coming up with solutions made sure it went through. It was annoying but I was so glad I didn't lose my sale.