Buying a repossessed flat and asked to pay for previous works?

Buying a repossessed flat and asked to pay for previous works?

11:44 AM, 4th July 2016, About 7 years ago 6

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I’m ready to exchange on a repossessed flat. I’m required to pay a hefty bill for works completed earlier this year (before my period of ownership).expense

I’ve asked for exemption but the company insists.

The property has been on the market for three months and there has been no offer higher than mine. Should I renegotiate the price because of this unforeseen expense?

What can I do if they refuse?



Neil Patterson

11:48 AM, 4th July 2016, About 7 years ago

Hi Kate,

Someone may of heard of this before, but surely the purchase price is the purchase price and takes into account the current condition of the property good or bad?

I wouldn't personally not pay anything as a side cost especially before completion that was not part of the Purchase Price.


13:16 PM, 4th July 2016, About 7 years ago

The devil is in the contract, see what you have agreed to pay. It may be the vendor who is responsible - this is the norm - but since the flat has been repossessed the contract may list different terms.

Graham Bowcock

13:25 PM, 4th July 2016, About 7 years ago

Dear Kate

It sounds like the flat you are buying is leasehold (as most flats are) and the previous leaseholder is in arrears with his service charges, which presumably cover repairs (but possibly other issues such as insurance and management fees). Assuming that the charges were correctly due under the lease then they will run with the property. Most purchaser's solicitors would withhold monies outstanding before paying the vendor's solicitor so the amount paid for the flat is the same but part will be credited to the management company. Most management companies or freeholders will not consent to a sale where there are arrears; consent is conditional on no money being outstanding.

The best course of action is to speak to your solicitor and make sure they are absolutely clear about the situation.


Gary Nock

21:30 PM, 4th July 2016, About 7 years ago

Hi Kate,

Neil and Graham are spot on.

Who do the management company they think they are kidding? You pay the purchase price and if the management company are worth their salt they would have put a charge against the property to recover any unpaid service charges. Do not under any circumstances agree to pay or indeed pay charges prior to your ownership. If it's a repo it's normally dealt with by a building society or an agent acting on their behalf. And this also rings alarm bells. If they are trying to recover costs it may well be the reserve fund is spent out and you will end up with huge increases is service charges. Get someone who knows what to look for on service charge accounts to work out what's in the reserve fund for future works. If the reserve fund has nothing in it then seriously think about walking away. I have been there, done it, and just about ended up with the "T" shirt on my back. Freeholders and Managing Agents can be a pain to deal with. Make sure you know what you are getting into. Google the Freeholder and the Managing Agents and see what is said about them.

Kate Mellor

21:12 PM, 6th July 2016, About 7 years ago

Previous advice is correct. This is why your solicitor will ask for receipts for any ground rent payable as it will transfer with the property. Any unpaid ground rent, or by extension other debts payable to the freeholder or management company will transfer to the purchaser. As such your solicitor needs to determine the extent of any money owing to the freeholder and/or management company, make the vendor aware and then deduct these costs (if they remain unpaid on completion) from the funds paid to the vendor.

Nick Pope

9:41 AM, 9th July 2016, About 7 years ago

It is interesting to speculate who actually owes the money. As the bank/building society re-possessed the property then they were the de facto owners and they would owe the ground rent and maintenance charges for their period ownership. Consequently the management company should be chasing them and not you and the he vendor bank or building society must be well aware of the debts outstanding.
My advice is simply to say you will exchange and complete providing the vendors ensure that all unpaid ground rent, maintenance charges etc. are paid up in full. Otherwise take a walk.

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