General flat questions

[Skillmister]

then the main one which I know I should be asking questions, but I'm not quite sure what I should be asking.
its 980year lease, no charges, freehold is owned by a person. What questions should I be asking about that, especially as it needs total redecoration and I know most leaseholds have some restriction that you need to get permision? is there other questions i should be asking about the freehold/leasehold?

I know you've said no charges but i'll skirt over that with a general idea of questions you should be able to get answers to fairly easily (mainly by getting a copy of the lease off the agent)

• Ground rent amount
• Service charge amount
• Insurance "rent" amount
• Who arranges insurance?
• Is there a management company? Or who actually arranges/carries out maintenance work?
• Restrictions on alterations - usually restricts structural alterations completely. Lesser work varies case by case but usually anything you would just class as "redecoration" should be fine
• Restrictions on selling?
• Fees to sell (usually only in retirement flats but some blocks do have them)
• Fees for landlord/management company to provide usual leasehold replies to enquiries or information pack - these can be substantial when you come to sell

 

[Glaucus]

I know you've said no charges but i'll skirt over that with a general idea of questions you should be able to get answers to fairly easily (mainly by getting a copy of the lease off the agent)

Thanks, a bunch of questions sent with a few more added, wait and see what the reply is. Cross fingers as I like this one. Especially as it needs work doing, which is so hard to find these days other than at auction.

 

[Glaucus]

I know you've said no charges but i'll skirt over that with a general idea of questions you should be able to get answers to fairly easily (mainly by getting a copy of the lease off the agent)

got a reply, is there any red hearings you would be concerned about, the insurance doesn't sound right, doesn't sound like there's any provision for building insurance?

I would not be able to get a copy of the lease for you, this will be done by solicitors, when a offer is made and accepted. It is not something ourselves as estate agents will obtain.

• name or company name of the freeholder - Cant remember off the top of his head
  
• Ground rent amount? £15.75p PA
  
• Service charge? None
  
• insurance amount, who arranges building insurance who pays for it etc? You arrange your own insurance, through a company of your choice, for just your flat - Price varies on company

• who carries out the maintenance of communal areas and building, and who is liable for the cost (usually split equally between the number of flats) ? It is shared and the cost is agreed upon and split by the 2 flats
  
• is there any reserve fund for repair work? no
  
• does the freeholder expect any repair work to be carried out in the next couple of years and if so ballpark figure for repairs? no
• especially as it is essentially gutted, what are the restrictions on decorations and alterations? Not aware of any. Nothing explicitly mentioned in lease in regards to alternations
• any restrictions on the garden? no
• iirc you said the leak in the roof was repaired when was this and is there any warranty left? It was the gutter part of the roof which leaked had new timber and fibreglass that was replaced - no warranty, happened 3 years ago.
  
• is there any restrictions to selling? no
  
• is there any fees in regards to selling, and fees for questions and information from the freeholder? There may be charges - this will vary depending on what solicitor you use and what they charge for leasehold properties.

There is no gas to the ftp floor flat, downstairs does have gas, so it may be possible to get access - but there is none currently.

Please note that this flat is a conversion - the freeholder mainly holds the name of the land and there are not usually many - if any restrictions for properties such as this one unlike large blocks of flats that usually have these types of rules and restrictions due to maintenance companies. This is all something that would be investigated by your solicitor - who will have a copy of the lease.

 

[Skillmister]

First and foremost, they don't seem too keen to help with their reply about the lease. I get asked to provide them all the time by agents and do when i have it. Maybe the seller hasn't instructed a solicitor yet which is fair enough.

Insurance is a red flag if there really isn't insurance in place for the freehold. It may just be that they've misinterpreted the question, but you shouldn't have to arrange buildings insurance for your flat individually, only contents. You should be paying a proportion of the costs of a block policy that's already in place.

Didn't realise it was one of two flats in a building. Maintenance does generally tend to be a bit more ad-hoc in situations like that unless its a rare case where its been done properly and a management company set up. It's a recipe for disaster for you as a top floor flat owner though. When the roof needs replacing and there is no formal agreement to split the costs, I can picture you'll be forking out for it unless you have a very generous person below.

 

[Glaucus]

thanks, don't know if I should run or make a cheeky offer and if they turn it down walk away.
one thing I need to research but I forget the name, the freeholder is uncontactable however they're willing to by some insurance policy that would cover all costs if theres an issue? do you know what this is called as i cant find it on google atm.

other than that showed my dad around today, saw a few potential issues but nothing to major. Just think they are asking far to much for it with the freehold issues and the state of the property. if I did make an offer I think it would be 20k under asking and willing to go upto 15k under asking. This is assuming the freehold insurance thing doesn't put me off and im not sure how mortgages would handle it or if it makes it a no go.
any idea in this case how easy/cost it would be to by the frehold out.

and there's no building insurance s would have to pay that out of my own pocket, but doesn't seem to cost a huge amount unless there's a majour issue with that?

edit - A missing landlord indemnity policy

 

[Glaucus]

So close to saying yes to a shared ownership flat.
Two questions about the lease though.
Is it normal to have no limit on how much they can increase the service charge by?
And so many clauses saying leaseholder is liable for work/repairs etc if landlords insurance doesn't cover it. But no where saying what insurance level they must purchase. So could cover the bare minimum, everything or anything inbetween.

The rest looks like I would expect.

 

[Shoza]

Property insurance maintained by RPs for Shared Ownership is usually very good as they tend to be such big organisations, so I wouldn't worry about that.

Service charges are much the same as any flat and can increase/decrease quite randomly unfortunately - not really a problem specific to Shared Ownership but flat leases generally (lazy/skint Councils) forcing loads of service charges on new builds to cover stuff they won't take on.

I deal with a huge scheme of houses in Bracknell and the Council won't maintain the streets/grass verges so every house has to contribute to a rip off management company to do it instead - Council still charge full Council Tax to the owners, but now with less services!

 

[Skillmister]

So close to saying yes to a shared ownership flat.
Two questions about the lease though.
Is it normal to have no limit on how much they can increase the service charge by?
And so many clauses saying leaseholder is liable for work/repairs etc if landlords insurance doesn't cover it. But no where saying what insurance level they must purchase. So could cover the bare minimum, everything or anything inbetween.

The rest looks like I would expect.

Is there a reserve fund/sinking fund? If so that makes the service charge situation much better as big one off expenses are paid out of that rather than ramping service charge up unexpectedly

 

[Glaucus]

there is, which currently stands at £5700