Missing leasehold plans and indemnity insurance

bayo000 · 27 Jan 2015 at 17:55

Hey. Wonder if anyone has any experience of this. I’m buying a flat and it appears that the seller has only black and white copies of lease plans. My solicitors have requested that he takes out indemnity insurance which should be valid for approx. 30 years (TBC). Which seems fine as I don’t think I’ll live there for more than 10.

Does this seems alright or should I start looking elsewhere? Don’t really want to do that as I have already spent money on searches, mortgage etc and I like the property, location.

Also any idea how much it would cost getting new plans sorted out? My solicitor couldn’t tell but doesn’t think it would cost thousands of pounds which is my worry.
Thanks

john_s · 28 Jan 2015 at 08:36

Might know a little about it...

Depending on the property value, it's probably a hundred quid or so to insure it. I wouldn't worry about it. As long as your solicitor is happy that the policy covers the issue, I'd carry on with the purchase.

The insurance might run for ever (depending on the insurance company) and can be passed on to cover the future purchasers when you sell the flat.

Vanquish-Storm · 28 Jan 2015 at 09:53

We had to take out indemnity insurance out on our house purchase because the seller did not have paperwork for the windows and they may not have been installed to the right regulations. It cost us £15... the seller refused to take it out so I paid it. I was not best pleased when I found out it was only £15 as it slowed down the purchase.

Not sure if it would be a similar cost for your case.

bayo000 · 28 Jan 2015 at 10:36

Thanks for replies. I was told it's probably about 100-200 pounds. My solicitors are saying the seller should pay for it but it is slowing things down. TBH I'm in no rush to move so I let him sort it out as it costs him more money having empty flat than me.

Shoza · 28 Jan 2015 at 14:15

Should be less than £200 if based in Manchester unless you are buying something worth a fortune! It is a genuine problem and it does come up more often than you would imagine but insurance tends to sort it out - make sure it's in perpetuity and not just for 30 years. There's little difference in the cost if you use a proper insurance provider.

kefkef · 29 Jan 2015 at 11:40

We tried selling the wife's old flat, they came up with the same issue. Missing leasehold plans for us (she'd never got any when buying it). That sale fell through. Sold again with a different solicitor and they got hold of the plans quite easily. Very strange!

Haggisman · 29 Jan 2015 at 12:16

Shoza said:
make sure it's in perpetuity and not just for 30 years

This - if you have perpetual insurance in place which can be passed forward to new buyers, it means that a) the issue doesn't put off potential buyers, b) your future sale will not be delayed by having to sort out the insurance c) you won't have to pay for the insurance when you sell

Glaucus · 29 Jan 2015 at 14:00

sorry to hijack, but what are the differences to buying a flat compared to house? I did want a house but the more I think about it, the less sense it makes as I want as cheap as possible living so I can still spend loads on hobbies/traveling.

how does leasehold work, how about maintance (in converted houses not purpose built flats)
do you apply for a normal mortgage?
if a mortgage gets turned down, realisticaly how long till you can apply again?
and any other things to check/ask when viewing.

There's two places I'm interested in, both have had price drops and been advertised since may 2014 accoring to property-bee.com plugin for rightmove and before I phone up for a vieiwng wnat to know what to ask/check and probably go online and do a mortgage in principle thingy.

DB_SamX · 6 Feb 2015 at 22:56

how does leasehold work, how about maintenance (in converted houses not purpose built flats)

From reading around, you want at least 70 years lease. Maintenance and ground rent covers building maintenance and repairs e.g. roof, lawun, communal areas, and possibly building insurance. I would budget £100/month. It can definitely be less but rarely more.

do you apply for a normal mortgage? Yes, but bear in mind that some lenders may not lend if lease is less than 70% (varies between lenders.) Extending a lease for 20-30 years can easily cost £10k+ so best the seller does that before buying.

Lots of stuff on leases online. Been reading on it because I can most likley only afford a flat as opposed to a house/freehold.