Who pays for major works - buyer or seller?

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    Who pays for major works - buyer or seller?

    Hi guys. Six months ago i had an offer accepted on a long leasehold flat. The estate agent warned us that there was a long overdue major works program in the pipeline amounting to £15k for each leaseholder. Fast forward to today - we are about to exchange and have an emailed undertaking from the vendor's solicitor to settle the major works which now form part of the service charge arrears since the cost became payable 3 weeks ago. However, the vendor is objecting to this at the the 11th hour since she feels this was our responsibility. The agent called today to relay this message. I pointed out that while he warned us about the major works there was never an actual understanding we would pay for it under all circumstances forever more.

    What do the experts here think of this scenario? Purely a matter of negotiation or is there an industry standard?

    #2
    Given you have not exchanged contracts yet it is down to negotiations.

    I would surely only accept to proceed if they foot the bill, particularly given the charges are now due (ie before you become the beneficial owner of the property).

    I would also want to have this reflected in the contract because "an email undertaking" is probably not worth a lot.

    Good luck.

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      #3
      So you agree with me that since the vendor has now been invoiced, it's their headache. From their perspective, the bill would have been my headache had we exchanged 1 month ago. I am tempted say 'tough luck' time has moved on - what do you think? How would you counter their argument that the buyer benefits from the works not the seller?

      Noted regarding undertaking. I hope solicitor would have sought something more concrete.

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        #4
        I have seen something similar, if the MA/FH chooses not to take the money from the current LH then the new LH is liable, so make sure you resolve it beforehand and do not think you can push the responsibility back to the previous freeholder.

        The previous LH was probably aiming to sell before this hit, having failed they may well no longer be able to afford to move or stay for that matter, but keep an eye out, you could get it as a repossession quite soon.

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          #5
          Originally posted by paulamis View Post
          I have seen something similar, if the MA/FH chooses not to take the money from the current LH then the new LH is liable, so make sure you resolve it beforehand and do not think you can push the responsibility back to the previous freeholder.

          The previous LH was probably aiming to sell before this hit, having failed they may well no longer be able to afford to move or stay for that matter, but keep an eye out, you could get it as a repossession quite soon.
          Well the FH has agreed with current LH that all arrears (there are others besides this latest major works) to come out of sale proceeds. MA/FH will not green light sale unless ALL arrears are cleared.

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            #6
            The person liable will be the leaseholder at the time the service charge arrives, it is normall for the conveyncer/solicitor to investigate this at the time and for the seller to pay or perhaps knock £xxx off the sale price.
            Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

            I do not accept any liability to you in relation to the advice given.

            It is always recommended you seek further advice from a solicitor or legal expert.

            Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

            Comment


              #7
              Originally posted by dominco View Post
              So you agree with me that since the vendor has now been invoiced, it's their headache.
              It is whoever's headache who the two of you decide it is. That's what happens when purchasing property.

              From their perspective, the bill would have been my headache had we exchanged 1 month ago.
              No because every half decent buyer asks whether any big bills from the freeholder are looming so if they thought you wouldn't find out then they are daft.

              I am tempted say 'tough luck' time has moved on - what do you think? How would you counter their argument that the buyer benefits from the works not the seller?
              I would do the same - with the reasoning that you as the buyer would never have paid for it in the first place because it was always a looming charge. End of discussion

              Noted regarding undertaking. I hope solicitor would have sought something more concrete.
              Hope is good but...

              Comment


                #8
                Originally Posted by dominco View Post
                So you agree with me that since the vendor has now been invoiced, it's their headache.
                Thats not what mattl said and you should not try and ram answers into your earlier understanding to find a simple answer-there isnt one.

                Using an analogy, you can buy two preowned cars of the same make and model. One has very old tires some scratches and and iffy sound system and needs a new carpet, so you want to reduce the price. If those will coast £x ponds the price is not reduced by £x as after they are done, the car would be worth more than the other comparable car as a result of your expenditure and the piece of mind it brings that it wont need much spent on pt for some time.

                The same applies to a building where the parties try to negotiate a compromise over the price and or cost of the works. As both of you have ignored thus until now its a game of brinkmanship of how much you want it versus how badly they need to to sell.

                Sorry but thats it. No rules except the deal to be done.
                Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

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                  #9
                  Thanks leaseholdanswers. I meant headache as in the onus suddenly shifts to the seller to raise the major works as an issue since it now belongs to the arrears total which ordinarily is cleared by the vendor. Anyway, i've had news the vendor is going to settle all arrears including the major works - a most pleasant surprise!

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