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House Buyers Could Face £180,000 Builders' Debts

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http://www.thestar.co.uk/headlines/House-buyers-could-face-180000.6678600.jp

NEW home owners in Sheffield could be facing unexpected bills totalling tens of thousands of pounds which should have been paid by developers.

Sheffield Council will today discuss pursuing residents for cash that builders should have paid under legal contracts called Section 106 agreements, which are drawn up when planning permission is granted.

Planning officers have drawn up a list of

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developments where payments have not been made and asked councillors to sanction action to recover the money.

A report to be considered by the council's west and north planning committee today said if developers default on payments, legal responsibility can pass to buyers.

The report said: "There is a risk that individual, private purchasers of residential units could become liable for unpaid obligations for those developments that are nearing completion and are for sale.

"The council will want to do everything within its power to focus any legal action on the developers and/or owners of the development who are responsible for unpaid obligation payments."

Officers listed six developments in Sheffield which had reached "trigger points" for payment but had failed to pay.

They said other cases "are likely to follow" but said the six were the "most pressing".

The highest unpaid bill is for an 81-flat block on Mowbray Street, Neepsend, where developers have failed to pay a £90,030.35 contribution which was meant to be used for public open space and to improve the sound insulation of neighbouring properties.

If the bill remains unpaid by developer Brewery Wharf Ltd the owners of each property could be left to pay a share of around £1,100.

Developers behind the 22-storey Velocity Tower at St Mary's Gate owe £43,750 for public art. Builders of seven homes on Denmark Road, Heeley, owe £8,255.45 and those of eight flats on Filey Lane, Broomhall, need to pay £3,749.20.

Do the buyers inherit the legal debt?

Sounds very harsh if they do.

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This developer's contribution is a nightmare. We've had to pay over £3k for a house we haven't even built yet. We're going to live in this house, too. It's not like we're selling it at a profit. Unfortunately, the contribution is not officially a tax and it is up to the council as to when they request it.

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http://www.thestar.co.uk/headlines/House-buyers-could-face-180000.6678600.jp

Do the buyers inherit the legal debt?

Sounds very harsh if they do.

Yes they do, apparently.

Funny how the media is now showing buying property in a bad light, and not a good one, as it has over the last 10 years.

Just shows what sells papers now. :o

The likes of 'Cowboy Builders' on C5 featuring my hero Domonic Littlewood, has now becoming more prominent than the usual 'must buy property shows'.

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This developer's contribution is a nightmare. We've had to pay over £3k for a house we haven't even built yet. We're going to live in this house, too. It's not like we're selling it at a profit. Unfortunately, the contribution is not officially a tax and it is up to the council as to when they request it.

£3k?

Sounds like a small contribution to the infrastructure/services being installed for you from the communal purse.

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http://www.thestar.co.uk/headlines/House-buyers-could-face-180000.6678600.jp

Do the buyers inherit the legal debt?

Sounds very harsh if they do.

Normal in Spain for instance, so I believe it. New infrastructure developments are billed to property owners. These are usually foreigners of course.

In the UK, when you buy in a council estate, freeholders are billed for any work on the estate, a similar concept.

Edited by Peter Hun

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In the UK, when you buy in a council estate, freeholders are billed for any work on the estate, a similar concept.

Sorry, but that sounds a little far fetched. Maybe on isolated estates, but I doubt it is the norm, or even the not-quite-so-norm. Do you have any links saying this is the case?

Edited to add: from a litle google searching, it appears that this is commonplace.

You even have to get permission from the council (the "landlord", even though you are "freehold"?) to make alterations / additions to "your" house, even if it is freehold. THis is in addition to any planning laws that you also have to comply with (and perhaps get planning permission for).

Outrageous!

Edited by Lepista

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£3k?

Sounds like a small contribution to the infrastructure/services being installed for you from the communal purse.

Installed for the DEVELOPER, not you. And he should have paid, instead, by some means (bankruptcy?) he has passed his obligations onto someone else. I didn't think you were in favour of being made to pay someone else's debts.

This is very ominous news. If the developer succeeds in getting this charge pushed onto the vendors, then expect it to become commonplace.

On a similar note, I once rented an industrial unit. In the tenancy agreement was a clause stipulating we would be responsible for the future development of the industrial estate, i.e. the cost of laying new roads. We took it back to our solicitor who obviously hadn't read the document, and he got it struck out. The landlord was astonished it was even there, it seems to have been some boilerplate pasted in. The other tenants hadn't even noticed it. If this is common, I expect we will see lots more wriggling out of obligations as money becomes tight.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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