It is always exciting to be buying a brand new property, whether it is your first home, your next step or an investment for your pension. It is like any retail experience where the newness and expectation is all; except of course on the largest scale you will buy anything and you need a lot of help and guidance.
If you are buying a new flat in a new development your first engagement will most likely be with the developer’s sales team. You will be looking at plans, models and 3D imagery in the show home alongside the scaffolding, cranes and concrete. Once the development reaches practical completion, (PC i.e. finished to be able to complete the sale to you) then it is time for the final checks, completion of legal paperwork and transfer of the purchase price. The keys are handed over and the flat is yours.
At practical completion the management of the property will be passed over to the managing agent who will be responsible for running the service charge and delivering the services to maintain the building. This is where the grey areas start. In an ideal World at practical completion everything will be finished perfectly and the builders would all leave site and the manager take over.
In reality because of the process of development it doesn’t work like that. The contractor wants to get their money for building the building and wants PC as soon as possible. The developer wants PC so they can complete the sales and get in the purchase monies to be able to pay the contractor and make their profits. This often means that the first units sold will still have other parts to finish around them. The timescales and impacts can be dictated by when the contractor or developers year end is or quite simply the nature of the financing of the development. A complicated process and it has been ever thus probably back to when Noah contracted his Ark to be built.
The biggest challenge this can create however is between flat owner and managing agent. You do not care who deals with what parts if you have items not working or the next phase of the building works is causing nuisance, dirt or dust. However, it is important to understand the different roles and the different relationships between the various parties as it can ease stress and strain as well as enable more effective solutions to your issues.
Perhaps the development process is one area that needs explaining more and there should be a greater understanding of the different roles and responsibilities. When the purchase of a flat is a very occasional experience you have to learn so much so quickly that easy guidance and assistance is essential. The team at the Leasehold Advisory Service are there to help and advice. On the website there is wealth of advice and guidance.
Non Exec Chair Leasehold Advisory Service
8 January 2017