The five stages → Sale
Selling a unit on
Most units are held. A unit is sold when holding it stops making sense, and the decision is taken early rather than after a stage has already started.
The three reasons a unit leaves
- A lease getting short
- A lease below the length a lender will accept narrows the buyers to cash. Extending is possible and is costed as a works item like any other; where extending costs more than the unit gains by it, the unit is sold with the lease as it stands and the lease length is disclosed at the front of the pack rather than discovered in it.
- A decision taken for the whole block
- A major works bill levied across the block, a change to the way the building is managed, or a decision taken at a freeholder’s meeting in which the company holds one vote. The company cannot programme around a decision it does not control, so the unit is sold rather than held against it.
- A works list that will not pay back
- Found at a periodic visit or at the end of a tenancy: movement, a roof at the end of its life on a unit that owns a share of it, drainage. Where the works cost more than the unit will carry, selling is the cheaper decision, and taking it before strip-out is cheaper still.
What the buyer’s solicitor is sent
The pack is assembled from the folder, not from scratch. Each line below names where the document comes from and the stage it has been on the file since, which is why the enquiries come back answered rather than chased.
| Item | Comes from | On the file since |
|---|---|---|
| The lease and its remaining term | the acquisition file | acquisition |
| Service charge accounts and the last two demands | the managing agent, filed as received | acquisition, then annually |
| Electrical installation certificate | issued at second fix during the works | the works |
| Electrical installation condition report | the most recent report in the folder | the holding period |
| Gas safety record, current and previous | the engineer, at each renewal | each twelve-month renewal |
| Building control completion certificate | issued on the notifiable work | the works |
| Window installation certificate | the installer’s own registered scheme | the works |
| Energy performance certificate | the assessment held for the unit | before the first letting |
| Tenancy agreement, deposit certificate, prescribed information | the tenancy file | the tenancy start |
The tenant’s referencing file is not in the pack. It belongs to the tenancy and not to the unit, and it is not sent.
What happens to the tenancy
Where a unit is sold with a tenant in place, the tenancy is part of what is being sold and nothing about it changes. The tenant is told in writing who the landlord becomes and from what date, the deposit is either transferred to the new landlord’s scheme account or returned and protected again by them, and the readings taken at handover go to the tenant as well as to the buyer.
Where a unit is sold empty it is sold in the condition the snagging list closed in. It is not decorated again for the sale, because decorating for a photograph and decorating for a tenant are different jobs and only one of them is honest. A unit that has been let is described as a unit that has been let, with the dates it was let.
The folder the pack is drawn from is described on the compliance record, and the acquisition documents at the front of it on taking a unit on.