I pay a mortgage on a leasehold ex-council flat. I get the odd letter from the council saying they have appointed contractors to do various works for six- to eight-figure sums of money - but no date for the works or an idea of how many flats in the block will benefit from them.
I’m thinking of getting out of the landlord game and selling up - I’m an accidental landlord and estimate the regular rental income plus future capital gain won’t be worth the hours of admin involved in letting the flat.
Will I be lumbered with the costs of these works e.g. in the form of a survey on the property revealing future bills to pay?
As long as you don’t try to hide that you’ve been notified about the work to be done (usually it’s a question to the seller whether there is any work planned) then you can’t be held liable once the sale is completed. If they want to negotiate on it then the time for that is before signing anything. When you sell, the work hasn’t been done. When it is done, the property will be worth more. It’s the new owner that will be getting the benefit of future work, not you, so why should you pay?
I just sold one and informed the buyer of an estimate for work to be done ‘some time before March 22’. It was noted that it needed to be done on the survey so as far as I was concerned the valuation took the fact the work needed doing into consideration and they were aware of it when they made their offer. They tried to say they wanted me to pay it last minute and I stood my ground and said no, I’ll put it back on the market since I’ll probably get more for it now anyway. They accepted liability and completed the sale.
Thank you Debra, that is very encouraging! I understand now that having a pipeline of future works can be an advantage, raising the value of the property for the potential buyer.
Is this to do with cladding? I have a feeling because of the furore about tenants paying for builders mistakes there will be some sort of decision that will be made on this. Flat owners are being made bankrupt over a government oversight although no one is really to blame but least of all the owners. Builders have a big burden of blame here. Good luck I totally understand selling up. The government has made it impossible to be a landlord now. Again they’re making a rod for their own back because without landlords how will they cope with people who can’t afford the 300k plus tag on housing.
I think it only shows in a survey if a Section 20 notice has been served. So act quick before one gets served. We’re in a similar position and that’s what we’re doing…
Hello Harbinder, I don’t think it is cladding because my low-rise block was built in the 80s before that kind of thing became popular. That said, it’s hard to be sure about these things.
Hello Molly, I have a drawer full of notices of proposals, notices of intentions and notices of contract awards. Not sure if they count as S20s. I’d love to hear more about your situation - maybe that will make things clearer.
Easy answer is: no. They are due when they are due. Possibly you might be part-responsible if they happen within a period where you pro-rata the service charge etc. Speak to a solicitor is the best advice.
However, you will need to disclose them when selling so some buyers might get cold feet or want you to pay a portion of them.
I think it is very normal for council flats. However, not just council flats, a lot of private flats also face same issues post-Grenfell. Normally council will let you know at least a year in advance of any major costs and it will be found in the survey. Depends on what the work is, some is remedial in nature and could come off the price, some is future improvement and so shouldn’t come off price. E.g. on my council flat I will get charged £800 to part fund the new intercom entry system but I think that is OK as it will add value in future so I didn’t negotiate it off the price.