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Living in USA and UK, any thoughts?

Living in USA and UK, any thoughts?

Old Jul 26th 2015, 12:09 pm
  #61  
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Default Re: Living in USA and UK, any thoughts?

One thing to consider when buying an apartment in the UK is the reserve fund. Monthly maintenance charges are low compared to where I am in Toronto. Here the condo company must have enough money in the reserve fund to cover major repairs/renovations. This is often a million dollars or more. Our condo fees are almost $1,000 per month compared to about £50/60 per month that we were quoted when looking at apartments in the UK. In the UK if major repairs/renos are required all the owners have to chip in...this could be thousands or tens of thousands of pounds each.
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Old Jul 26th 2015, 12:30 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Jerseygirl
One thing to consider when buying an apartment in the UK is the reserve fund. Monthly maintenance charges are low compared to where I am in Toronto. Here the condo company must have enough money in the reserve fund to cover major repairs/renovations. This is often a million dollars or more. Our condo fees are almost $1,000 per month compared to about £50/60 per month that we were quoted when looking at apartments in the UK. In the UK if major repairs/renos are required all the owners have to chip in...this could be thousands or tens of thousands of pounds each.
There's nothing to stop you creating your own "reserve fund" though. ...... You'd be exposed until it had a decent balance, but depending on the age and state of repair of the building, it would be prudent to put at least £200-£250 each month until you had £10k set aside.
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Old Jul 26th 2015, 12:33 pm
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Default Re: Living in USA and UK, any thoughts?

If you are buying a leasehold apartment in the UK you should get a survey and specifically ask the surveyor if there are any big maintenance expenses likely to occur in the foreseeable future.
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Old Jul 26th 2015, 1:14 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Pulaski
There's nothing to stop you creating your own "reserve fund" though. ...... You'd be exposed until it had a decent balance, but depending on the age and state of repair of the building, it would be prudent to put at least £200-£250 each month until you had £10k set aside.
True, but this doesn't help with the vexed problems that could arise with less financially responsible neighbours. You have your reserve fund with £10k or more in it. You just need a couple of neighbours who refuse to contribute, and it could drag on for years, with the roof leaking on all, the financially willing and financially unwilling alike.
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Old Jul 26th 2015, 1:20 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Editha
If you are buying a leasehold apartment in the UK you should get a survey and specifically ask the surveyor if there are any big maintenance expenses likely to occur in the foreseeable future.
This reminds me of another wrinkle in England - shared freehold, I think it's called. We looked at a few subdivided Victorian or Edwardian houses in Cromer. Some were leasehold, but others had a shared freehold situation which I think meant that each owner had financial obligations to the other owners, and there was no management agent involved. Seems like a recipe for disaster when one owner starting getting water coming in and the others weren't immediately affected...
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Old Jul 26th 2015, 1:21 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by robin1234
True, but this doesn't help with the vexed problems that could arise with less financially responsible neighbours. You have your reserve fund with £10k or more in it. You just need a couple of neighbours who refuse to contribute, and it could drag on for years, with the roof leaking on all, the financially willing and financially unwilling alike.
The non-payers can veto a necessary repair? ..... I thought that the freeholder just sued the leaseholders?
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Old Jul 26th 2015, 1:22 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by robin1234
True, but this doesn't help with the vexed problems that could arise with less financially responsible neighbours. You have your reserve fund with £10k or more in it. You just need a couple of neighbours who refuse to contribute, and it could drag on for years, with the roof leaking on all, the financially willing and financially unwilling alike.
Paying fees to build a decent reserve fund is a much fairer system IMO. Why should John Smith have to fork out £30K for major repairs when he only bought the apartment a few months ago? The previous owner had lived there for 15 years and had paid almost nothing towards repairs/renos.
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Old Jul 26th 2015, 1:35 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Jerseygirl
Paying fees to build a decent reserve fund is a much fairer system IMO. Why should John Smith have to fork out £30K for major repairs when he only bought the apartment a few months ago? The previous owner had lived there for 15 years and had paid almost nothing towards repairs/renos.
In theory, as is implied by Editha's post above, the value of a unit in a building in poor state of repair would be worth less to reflect the deferred maintenance, thereby costing the seller money which is transferred to the new owner in a discounted price. Certainly there would be fewer buyers even interested if the shell and common areas are in a poor state of repair.

All the last few posts explain why many people, me included, won't touch leasehold/ condo properties.
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Old Jul 26th 2015, 1:37 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Pulaski
The non-payers can veto a necessary repair? ..... I thought that the freeholder just sued the leaseholders?
Yes, but that's what I meant by "dragging on for years." Not to mention bad feelings etc. between neighbours.
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Old Jul 26th 2015, 1:42 pm
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Default Re: Living in USA and UK, any thoughts?

'Shared freehold'? I'm not sure I understand what you mean Robin. A common situation is where the freehold of the entire building is held by a tenants' association, usually set up as a limited company. What you buy is a leasehold flat, but you also get an automatic share in the tenants' association.

Personally, I prefer that arrangement to the freehold being owned by an outsider, whether it is a management company or a private individual.

Nowadays, the holders of long leases are entitled to get together with the other leaseholders in their development and jointly buy the freehold. They may still set up a management company, but they won't have any ground-rent to pay.
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Old Jul 26th 2015, 1:47 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Pulaski
In theory, as is implied by Editha's post above, the value of a unit in a building in poor state of repair would be worth less to reflect the deferred maintenance, thereby costing the seller money which is transferred to the new owner in a discounted price. Certainly there would be fewer buyers even interested if the shell and common areas are in a poor state of repair.

All the last few posts explain why many people, me included, won't touch leasehold/ condo properties.
We saw properties at both ends of the spectrum... the subdivided Victorian or Edwardian piles with complicated rooflines and suspicious damp patches on walls, and this newly built building that we eventually bought a flat in. The new build starts out with the NHB guarantee for several years. Some of the flats in Edwardian piles were priced spectacularly lower, for the reasons you suggest.
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Old Jul 26th 2015, 1:52 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Editha
'Shared freehold'? I'm not sure I understand what you mean Robin. A common situation is where the freehold of the entire building is held by a tenants' association, usually set up as a limited company. What you buy is a leasehold flat, but you also get an automatic share in the tenants' association.

Personally, I prefer that arrangement to the freehold being owned by an outsider, whether it is a management company or a private individual.

Nowadays, the holders of long leases are entitled to get together with the other leaseholders in their development and jointly buy the freehold. They may still set up a management company, but they won't have any ground-rent to pay.
Here's a definition from the Leasehold Advisory Service..

Glossary : Leasehold Advisory Service : Frequently Asked Questions

Essentially what you say in your first paragraph.
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Old Jul 26th 2015, 2:17 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by Pulaski
In theory, as is implied by Editha's post above, the value of a unit in a building in poor state of repair would be worth less to reflect the deferred maintenance, thereby costing the seller money which is transferred to the new owner in a discounted price. Certainly there would be fewer buyers even interested if the shell and common areas are in a poor state of repair.

All the last few posts explain why many people, me included, won't touch leasehold/ condo properties.
As I said in the other thread when we were discussing this subject...living in a condo suits our needs at the moment. We want an outside maintenance free home...one that we can lock the door and leave for months on end and know it's secure.
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Old Jul 26th 2015, 4:49 pm
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Default Re: Living in USA and UK, any thoughts?

I've lived in long lease flats twice, once in my twenties which was my first purchase, and then a Docklands flat in my forties. In the first property there was a problem with building maintenance, due to a badly drafted lease, but the flat was still a good investment. My Docklands flat would have been a brilliant investment if I'd kept it (I try not to brood on that).
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Old Jul 27th 2015, 3:18 pm
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Default Re: Living in USA and UK, any thoughts?

Originally Posted by not2old
for that flat in Norfolk, is it not that a 700 sq'ft space is the size of a triple garage or a backyard pool in Texas?

Bigger than a garden shed mind you ....

.
Gun cabinet.
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