I am a new tenant, having moved in December 2020. Six months after I moved in we received an invoice for major works for £160,000.
I asked the owner before buying the apartment, but he did not inform me of the extent of this work.
There are six apartments in the building. Three belonged to the free owner and three to the tenants. No work has ever been done since 1933.
I just moved in and I have to pay, it’s so unfair.
The three tenants decided to share the bill because it was too high. Around £40,000 each. Now the first bill due soon is £20,500 each and additional charges if they occur. I would never have bought this property if I had known the magnitude of the costs. CM
Buying a rental apartment can present unexpected surprises if you don’t do your research
Myra Butterworth, MailOnline property expert, replies: Purchasing a lease can present unexpected surprises if you don’t do all your research before signing on the dotted line.
One of the problems with the lease is that it is a complex and archaic system, parts of which are no longer suitable for use in the modern world. Indeed, the government is currently reviewing the leases and drafting new legislation in an attempt to address some of its shortcomings.
It is important that you take into account and follow the advice given before a purchase, including in an inquiry mentioning the works to come.
We discuss with a legal expert your options in this particular case and whether you are obligated to pay the full money.
Stephen Gold, former judge and author, explains: Tenants who hold emphyteutic leases have a knack for making a quick sale once they have an idea of major work plans in the building. Before agreeing to buy a lease, it is imperative to be well informed about the intentions of the owner to carry out repairs and improvements for which you could be called upon to contribute to their cost.
Ask the owner or his managing agent. Ask the seller what he knows. You may find it prudent for your transfer agent to complete the standard written inquiries on the subject that the seller must respond to. Obtain recent minutes of all residents’ association meetings. Talk to other tenants. If you have any doubts or it looks like a hefty bill might be coming your way, talk to a surveyor about the likelihood of expensive work being required and the amount of the bill. Try to get your vendor to agree in the contract to reimburse you for exceeding a specific amount of any service fee request you receive within a specified time after completion.
Our interlocutor has covered part of this ground. She knew from the seller before she agreed to simply buy that “exterior decorations and repairs” were expected, and she took comfort in the fact that he had put £2,700 into a reserve fund for her contribution. If this information had been false and she had relied on it, then she would have had a claim against the seller for misrepresentation.
The drafting of the lease must be scrupulously studied if you plan to buy an apartment
But she knew much, much more and therefore could not trust what the salesman had said. In particular, she knew from her surveyor that the balconies and the flat roof needed attention, which turned out to be correct and expensive. The repairs and redecoration of the balcony of his apartment were noted in the investigation report and a note of his conversation with the expert referred to it as ‘replacement’ and ‘very expensive’. As for the roof, the report stated that ongoing repairs were expected and that emergency repairs may be required. It follows that she went into the purchase with her eyes open. If she wanted to put a price tag on the likely cost of what was needed, she should have gotten an estimate from the author of the report she had obtained or, better yet, consulted a building expert.
Stephen Gold is a retired judge and author
Where a surveyor is negligent in failing to draw attention to defects and are relied upon, he may well be liable for compensation, whether commissioned by the potential mortgage lender of the buyer or directly by the buyer. Even the seller’s real estate agent who misrepresents the buyer about facts about a property on which he relies can engage the seller’s liability on the grounds that the agent’s sins become the seller’s sins. However, I do not consider that there was negligence here on the part of the surveyor. Also, although the real estate agent gave certain information to the interrogator on the roof, I am not convinced that she can demonstrate that it was false. In the event of an error by a surveyor or a real estate agent, they can still escape their liability if they can demonstrate that the buyer would have made the purchase and at the same price, whatever they have said.
Our interlocutor feels disappointed because the owner did not tell her before she agreed to buy the work that could be planned. She discovered them about six months later. But she had her surveyor’s information that could have been expanded and encrypted. I do not consider that the law can offer him any recourse against the owner.
The wording of the lease must be scrutinized. If it does not impose on the tenants the obligation to pay for certain works, then there will be no legal obligation to contribute to their realization. It is said that no work has been done in the building for 33 years and the questioner criticizes the negligence of the owner. It could well be argued that this negligence has increased the extent of the deterioration of the building and therefore increased the cost of the work and that this should be reflected in what the tenants have to pay. A challenge by a court to the level of service charge contributions could be made to the First Level Property Chamber (Residential Property).
Stephen Gold is a former judge and author of “The Return of Breaking Law” published by Bath Publishing. To learn more about service fees, go to breakinglaw.co.uk