Takeouradvice Here areRingley’s toptipsforwould-beflatowners
nAsk your solicitor to explain the balance sheet to you, so you knowwhat reserves there are held against your block, check all reserve funds are separate and check balancing charges have been collected –ifnotmake sure your solicitor holds a retention against the previousowner;
nIf there’s no reserve fund, check if theMemorandum &Articles can be used to collect one.When choosing amanaging agent, choose one that provides a costed reserves plan within the management fee; at least then you’ll knowthere is a future plan;
nUnderstandwhatwas last donewhen. Ask the surveyorwho does your pre-purchase surveywhat repairs might cost and how much you might need to contribute towards the next decorations cycle;
leaseholdersneed open disclosure of the facts
solicitor’sroleand responsibility anddisplaced this to thebettermanagingagents? Here arethree keyquestions forthe legal
profession: nWhyare lawyersdraftingexternal
redecoration clauses on three or five- yearly intervalsifpaintmanufacturers will
guaranteetheir paintsystemsforseven years? nHowcan somany solicitors let sales go throughwithout retainingfunds against
future balancingcharges? nWhyask forthe servicechargeaccounts if you are not going to interpret them?
OpendisclOsure What leaseholders really need is a Directive imposedontheUKGovernment requiring open disclosure at thetimeofpurchasinga
flat on key facts such as: nAlease officially becomes ashort leasefor
the purposes of mortgage finance at 70 years; nWhen there are less than 80 years left on a leaseyou have to paythe landlord 50%ofthe
enhanced value for a long lease; nServicechargeaccounts in non-compliant
Flat Living Autumn2012
understand what was last done when
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nIf you don’t have a good lease, invest in getting one. Use Section 37, 1987 Act to vary your lease if you have no reserve clause, need to bank roll the service charge, can’t install amodern wooden floor etc…, the problemis Section 37won’t allowyou to do this as one leaseholder on yourown – even if itmakes sense;
nIf youare buying a property in a larger block andbigworksorroof renewal is contemplated, check if a chartered surveyorhas advisedon phasing – if you’re paying foraspecificationofworks, it shouldn’t costmore to
lease, invest in gettingone
if youdon’t haveagood
establish phasing. There’s quite a bit of case lawwhich has proved that assuming everything needs doing at the sametime could be notonlyawaste ofmoney but also an ‘improvement’ or ‘unreasonable’.Leases don’t usually providefor improvementsexceptwhere such significant repairs are required that a repairwould constitute renewal instead;
nIf youwant amanaging agentwho can’t have incestuous relationships with suppliersor
contractorsthenchoosean RICSregulated firmwho can’tchargeyou hidden fees and can’temploy connected parties;
nIf you’re buying into an RTM‘right tomanage’ block find out howmanymembers there are. Youmaybe taking onmore responsibility than you think, ie, bank rolling theservice charge(although thisonly happensonarrears billed leases -say5%of leases pre 1980)
nThere are costs involved in running anRTM companythatstrictly speaking only fall on the RTMcompanymembers. Numberswilldiminish over time as people sell
becauseRTMmembership, unlike freehold purchase membership is not tied to the property.
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