Issues with leasehold purchase.. upcoming works?

[Bluehasnoclue]

Hi all,

I have been reading everything here for a good while now & had an offer accepted on a leasehold property at the beginning of the year (no chain).

I’m somewhat surprised that this is still ongoing however appreciate these things take time (especially with leasehold). The estate agent has been great at chasing too and very helpful.

There have been a few red flags so far and I wondered if I could have your opinions please.

I’ve been informed that there are planned upcoming works, however they have not been quoted for as of yet. I’m really concerned that I will move in and they will hit me with a huge bill. I appreciate that this is a risk of leasehold & unfortunately there are no other options available to me. I wish I could buy freehold but it’s not a feasible option & won’t be in the near or distant future. Given that the works were announced last year and planned for, is there anything I can do to avoid this happening?

They also can’t confirm how much money is in the reserve funds currently due to recent works, which means it’s unclear if there is any money in there to support the current planned works.

I do plan to still continue but would appreciate any advice or guidance anyone can offer around whether there’s any way to mitigate the risk/impact of this on me.

Thank you!

I wouldn’t continue without better information forthcoming on the reserve funds and scale of works, and current and future estimated service charges.

I speak as someone whose first property (share of freehold in a large block) was A-OK at due diligence pre-purchase, and then 4 months after moving in the (huge, conservation area) roof developed a major leak and we spent 4 years paying huge amounts to cover lack of sufficient funds despite a reserve fund…

The fact they can't tell you what's in the reserve fund concerns me

For major works, they have to serve notice if they will be asking for more than £250

www.lease-advice.org/advice-guide/section-20-consultation-private-landlords-resident-management-companies-agents/

That said, in my block, the service charge skyrocketed in order to pay for works. The residents association are looking after it so I haven't looked too closely at it but they seem to have used it as a way to get round serving a section 20.

I also haven't looked at it because it's necessary work and I'm tired of people trying to get out of doing it, their excuse the last two years was effing Covid!

I have also lived in shared freehold and that has issues too.

But the reserve fund thing is odd, sorry.

X post
this happened in my share of freehold
we had to pay for years of neglect by previous owners
the "luck" factor can't be managed, sadly.

Thank you NoSquirrels.

I get the feeling that all involved think I’m being exceptionally difficult to want more info & that I should just be happy to go ahead with that but to me it seems very risky to do that..

I’m so sorry to hear about your experience that must have been awful. How frustrating!

You need to be dealing with facts and figures - does it give an indication of what’s needed? New roofs? Subsidence? Or smaller scale?

If you don’t know what’s in the pot how are you to know the outlay?

How many others are affected? Block of flats? If you are top floor are you responsible for the roof entirely?

Too many questions here - do not proceed without answers.

in the 80’s people lost their homes because they couldn’t afford the works.

They absoloutley should be able to tell you what is held in reserve. They will be audited on this specifically.

Additionally, they cannot hit you with an immediate bill for a new roof. They will build into your charges an amount for replacement (of which the roof will be), and will calculate how much you pay over the lifetime of the roof.

The surplus/deficit usually comes from the day to day services being over/inder the quoted amount (eg if you chip in for communal elec then the world goes to shit and the elec bill doubles).

The big ticket stuff (in my experience) is spread over many years.

Similarly, they have to do consultations. If they don't consult with leaseholders, they cannot pass on more than a capped amount, which is really low.

They should be able to tell you how much the work that has been done costs. Then your solicitor can organise to retain enough from the purchase price to cover the bill when it comes.

Future works are tricker unfortunately. If they’ve not even got as far as serving the first section 20 notice, at best you’ll get a rough idea and as the owner at the flat at the time work was done you’ll be liable.

There’s a world of difference in costs that ‘planned works’ could cover - everything from repainting a communal hallway at the lower end through to replacing an entry system or serious structural stuff like roofs.

When you say “everyone” thinks you’re being difficult - who do you mean? The vendor might have a vested interest in you not looking too closely, if they’re aware of major works coming down the pipeline they don’t want to pay for. The estate agent works for the vendor. Leasehold management companies are usually slow at providing the information and hold stuff up, and can be anywhere from totally on it to totally shit at their responsibilities.

Your solicitor or conveyancer however should be all over this and getting the information and if they’re not, they’re rubbish.

Don’t let anyone fob you off.

The amount of disinformation on this thread is laughable.

Yes, the LPE1 should and will tell you what is in the reserve.

No, there is no way of safeguarding future demands for major works.

What you pay proportion-wise will be set out in the lease. No way around that. If the flat is one of 4 and you all pay equal shares and a new roof is needed then you pay 25%. If it's one of 4 and your share is 1% then that is what you pay.

Thank you all so much for your responses, it is much appreciated! I’ve done so much reading and learned a lot so thank you.

In terms of the planned works, it’s ‘work to the balconies’ but it’s unclear if this means a paint job or something structural so I have asked for further info. I’ve been told it hasn’t been quoted for yet but it has been mentioned on the LPE1 & in the AGM last year. Thankfully not the roof!

Recently expensive works took place (lift), so I’m even more conscious that the reserves are probably low if not non existent.

Thank you for giving me the confidence to challenge about the amount remaining, I’ve gone back & insisted that I’m provided with that info & also a quote for the planned works.

@NoSquirrels I’m talking the vendors solicitor & the management company. My solicitor has chased but everyone keeps coming back ignoring/being vague on the important questions & I’m getting a bit fed up now given how long it’s taking. But I won’t let them fob me off, they’ll have to provide the info!

Thanks again all!