Blog - 09/07/2020
How to avoid problems when purchasing a property
Buying a property is one of the most significant purchases that a person can make in their lifetime. However, the inevitable excitement can soon turn into despair if care is not taken to avoid some pitfalls which can occur when buying a property, in particular a new build home.
Here are some of our red flags to look out for which may help minimise potential problems with your purchase:
- Independent Solicitors: When buying a new build property, the developer will often ask you to use a firm of solicitors from their panel for to deal with your conveyancing. It is essential you engage an independent firm of solicitors, as they will be less concerned with keeping the developer on side and therefore should ask essential questions panel firms often overlook. For example panel firms rarely use the Law Society recommended form for pre-contract enquiries, which are otherwise standard practice. Please also note the Council for Mortgage Lenders is now advising mortgage providers against purchases using panel solicitors, so you may find your lender will not allow you to use a panel firm.
- Building Survey: Ensure that you engage your own building surveyor to carry out a full structural survey. There is a common misconception that new build properties will be trouble and maintenance free, as they are new. However, there can be considerable problems due to the all too common lack of supervision during the build process. Please also note there is a reason why many project managers are now finding it difficult to obtain professional indemnity insurance. New or old, you should ensure that a building surveyor has carried out a thorough inspection of the property you want to purchase to identify any defects or workmanship issues that may have arisen. If appropriate you may also need to consult a structural engineer, a mechanical and electrical engineer or a fire safety expert (referred to further below).
- Common Parts: When buying a flat, your building surveyor should inspect the common parts and not just the flat itself. Defects in the common areas of the building can have a significant impact on your property and your service charges going forward and it is essential to ensure any issues are brought to light pre-purchase. Obvious examples are basement car parks that are not structurally solid, poor drainage and fire safety.
- Fire Safety: In particular when buying a flat, as well as considering obvious issues such as cladding, great care should be taken to ensure that proper fire stopping works have been undertaken inside the flat and within the common areas. You also need to ensure that you are provided with all fire assessment and relevant fire safety documentation prior to purchase.
- Movement: If your property is a new build on former woodland, which many are, care should be taken to ensure that the developer has recognised that soil movement is likely to have occurred and has taken steps to mitigate this by constructing more extensive foundations. Otherwise the property may require expensive underpinning which could then lead to problems in obtaining insurance. There can also be issues for the roads and services on an estate if inadequate groundworks including necessary support were undertaken before construction started.
- Insurance: Although most new build properties are sold with the benefit of a new build insurance policy, these new build insurers are often quick to deny cover. The insurers will usually require the builder to address defects in any event. Please note it is rare for these insurers to inspect new build properties themselves and so the insurance should not be treated as any sort of approval of the quality of the build. Therefore only limited comfort should be taken from your property benefiting from this kind of insurance policy.
- Sign Off: New developments require sign off by the Building Control Department of the local authority or by an approved building inspector. The latter often look to particular developers for work, but no one seems to question the potential conflict of interest this could create. In our experience, a Building Control Completion Certificate does not mean that the property is free from structural defects or workmanship problems. In practice, surprisingly few inspections take place. Even then it is difficult for someone from Building Control or an approved inspector to assess the quality of work, when the works have moved on by the time of an inspection. As a result, often defects or below par works that could lead to defects in the future cannot be seen by the time an inspection takes place. Absolute reliance should therefore not be placed on the building inspector’s sign off.
- Off Plan: Great caution should be exercised when purchasing a property off plan, as of course many of the steps listed above cannot be undertaken and you really are putting your faith in the developer having constructed the building properly. Try to engage your own building surveyor to inspect at all key points during the build, if possible.
- Lease terms: When buying a flat, make sure that your solicitor knows your intentions for the property and that there are no onerous lease terms that may prevent you from realising them. For example, if you wish to install wooden flooring, make sure you are not prevented from doing so. When people buy flats, particularly high value ones, they often think they can carry out any alterations they see fit. However, many leases preclude flat owners from doing so. In fact some leases will even prevent a landlord from consenting to alterations and will give neighbouring flat owners the ability to prevent this.
- Lease Extension: If buying a leasehold property, check how many years remain on the term. If there are 80 years or less, this will have considerable adverse impact on the flat’s value. Consider asking the seller to start the lease extension process to pass on to you the right to extend the lease. Otherwise you will have to wait two years after purchase before you can start the lease extension process. This could mean the cost of the premium for an extension could increase considerably while you wait for the end of the two year period.
- Know what you are buying: Many issues stem from purchasers not being fully aware of the land that they are buying. Make sure you know exactly the layout of the property. Ask the seller to confirm the exact position of the borders of the land and whether there have been any disputes about them. Many disputes occur over shared gardens, driveways and alleyways and so it is important for you to understand exactly what will be included in your property. It is also useful to clarify who owns any fences or walls bordering your property.
- Know thy neighbour: It is always worth asking your seller to confirm whether they have ever had any disputes or disagreements with their neighbours. It is very important to find out how well the seller got on with their neighbours. Difficult neighbours often create disputes and living next door to people like this can have a considerable adverse impact on your enjoyment, regardless of how perfect the property seems. It is a good idea to knock on the neighbours’ doors so you can see what they are like for yourself. It is also worth visiting the property at different times of the day to consider whether there are any noise issues, not just from neighbours, but also from various forms of transport such as roads, trains and planes.
- Trees: Ensure that you know of any Tree Preservation Orders affecting trees on the property. These can impinge your ability to cut back trees and can halt planned development works. Roots can also damage buildings in the proximity and care should be taken to ask questions about the potential impact of certain types of trees.
- Home views: This is a trip advisor-style website for home buyers to share their views on the reality of living in a residential development. This does not just cover ratings for the property and its location, but also reviews on the developer and the building’s management.
Edwin Coe has considerable experience in dealing with claims against developers and vendors of both existing and new build properties. Should you have any queries then please do contact Joanna Osborne or any member of the Property Litigation team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.