In many cases, though, modern consumer protections mean we don’t have to worry so much these days. If you buy something online, you can often get your money back with no questions asked if what you get is not what you expected.
Buying property, though, is a different matter altogether. Not only is it often an investment for a lifetime – and beyond – but it comes with complex rights and obligations that have significant financial implications. That’s why it is vital to ‘read the small print’, which realistically means asking qualified experts to check it for you. And that’s where solicitors come in, along with a range of other property specialists – including building surveyors.
We were recently asked to do a survey for a first-time buyer laying out £1 million on a flat in a new block. So new, in fact, that it was actually still a building site. Clearly, that meant we were unable to survey the finished property, but since the flat was a leasehold property, we recommended a leaseholder’s survey. This involves taking into account not just the flat itself, but the leaseholder’s responsibility for the upkeep of common areas, lifts and the roof. And it means paying as much attention to the lease as to the physical building, finished or otherwise, which can be done well in advance of completion.
To get the full picture, though, you do have to examine the lease and the building in tandem, at least to the extent that’s possible. Inspecting a building during construction, of course, you can never give a definitive thumbs-up that everything will turn out perfectly, but you can certainly identify the red flags that indicate the opposite.
In this case, we had a number of concerns. One of the subcontractors had fallen out with the main contractor. There were disputes over payments to consultants, which meant they were not involved in monitoring the works they should have been overseeing. Generally, the site was not a happy place, and we were concerned that shortcuts were being taken. All in all, it looked like the perfect storm was brewing: if there were no obvious defects on completion, it would only be a matter of time before cracks appeared – metaphorical or literal!
For this reason, we listed the works still to be finalised, and advised the client that a thorough snagging inspection should be written into their contract. Most importantly, we said they should have sight of the whole paper trail for the admin related to the remaining works – including warranties for the roof, lift, heating etc – and ensure certificates were in place to confirm these elements had been monitored and signed off by qualified professionals. We also recommended they get assurances that the building would be properly managed, and that service charges would be accurately calculated; developers are notorious for setting charges artificially low to attract buyers, only for them to shoot up on contact with reality, with the leaseholders picking up the bill.
Unfortunately, the client was not convinced any of this was necessary. Shockingly, their solicitor had advised them that everything was covered by a new-build warranty. In fact, the average new-build warranty has more holes in it than a Swiss cheese, with a get-out clause for just about every and any eventuality. If you have ever been talked into taking out insurance on a new phone, only to discover you are not actually covered in any realistic scenario of loss or damage, you will have some idea what I mean.
As indicated above, it is simply not true that new builds will not require attention, even in the short term. So it is essential that buyers make sure they are properly covered by detailed warranties for all elements of the building for which the lease makes them responsible. Hidden defects can appear even in the best managed construction projects. Where there are problems on site, as on the one we inspected, the risks are multiplied.
In the worst case scenarios, developers can fold, leaving responsibility for their mistakes with the leaseholders who bought properties in good faith. If their only recourse is a flimsy new-build warranty, they will be faced with an expensive bill for remediation, and not just as a one-off expense. It is important to understand that all buildings have an ongoing life cycle, requiring regular maintenance to prevent problems as well as remediating those that emerge. I hope our client has not bought a ‘money pit’, but that’s always a risk if you ignore expert advice.
In short, buying a property is not like shopping online: click now and you can always send it back if you don’t like it. That’s why it’s important to get the right professional advice before buying – and to follow it!
Julian Davies MRICS, MFPWS
T: 020 3667 1510
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