Leasehold Property Service Charge Query .....

[Snoopy1948]

Appreciate some advice on this one please.

Completed on the sale of my leasehold flat in April 2015 and pay the service charges, 6 monthly in advance, on the 1st January and the 1st July every year. These are fully up to date.

In the last week all the residents, there are 66 flats in our block, received a 'demand' for a Service Charge Deficit for the year 1st January 2015 to the 31st December 2015. I queried mine on the basis that I took legal possession of my flat in early April 2015 and was subsequently credited for the period 1st January through to the 9th April 2015.


However, it seems that I only received the credit on raising the query and it seems that the situation is the same for anyone who purchased during 2015, they have received no credit unless they have raised the same query. We all agree that smacks of poor management accountancy despite the fact that we pay through the nose for it.


My query however related to how the demand was apportioned. The block is a relative new build, built in 2010 and due to poor initial sales, many of the flats were rented to create income while the sales office continue to offer them all for sale. The managing agents have told me that if my flat had been previously owned by the freeholder ( i.e. rented with no previous owner ), then my credit would come from application to the freeholder for their earlier share of the service charge. They go on to state that if my flat had been previously owned, then, and I quote their response :

"Just to confirm (based on your note about other leaseholders having this same query) – this would depend on who the previous owner of the flat was. If it was the freeholder, as it is in your case, then we can arrange the credit for their proportion and charge them separately. However if it was another owner, then the current owner would need to contact their own solicitor to enquire whether a retention was held by the buyers solicitor to pay for such charges. If not, then the current leaseholder would be responsible for the full payment".

Is that the correct view here?

[Diana M]

Re: Leasehold Property Service Charge Query .....

received a 'demand' for a Service Charge Deficit for the year 1st January 2015 to the 31st December 2015. I queried mine on the basis that I took legal possession of my flat in early April 2015 and was subsequently credited for the period 1st January through to the 9th April 2015.

What caused the deficit?

Is it something which could have been foreseen so should have been included in the service charge demand which is usually based on an estimate and 'demanded' in advance? Or was it caused by something which couldn't have been predicted?

On your second point, I believe it's true that service charge issues usually travel with the sale so the buyer inherits the problem. Unless there has been a retention based on possible potential charges.

How much (per lessee) is the amount being queried?

Di

[Snoopy1948]

Re: Leasehold Property Service Charge Query .....

What caused the deficit?

Is it something which could have been foreseen so should have been included in the service charge demand which is usually based on an estimate and 'demanded' in advance? Or was it caused by something which couldn't have been predicted?

On your second point, I believe it's true that service charge issues usually travel with the sale so the buyer inherits the problem. Unless there has been a retention based on possible potential charges.

How much (per lessee) is the amount being queried?

Di

Hi Diana M and appreciate your interest ....

No reason was given for the deficit other than 'unfortunately it had arisen' . I have only been here since April 2015 so experience with the managing agents is minimal other than to say they make a lot of accounting errors, such as ( in this exact case ) not accounting for any apportionment and still charging me for the full year. Other examples have been adding VAT at 20% on domestic water supply bills when the rate is actually zero.

There are 66 flats here and everyone who moved in during the course of 2015 has been asked to pay their full deficit share regardless of the date that they moved in. IN fact, they appeared not to be aware of the problem until several people raised it.

The deficit originally charged to me was only £60 so not a massive problem. As for the buyer inheriting any unpaid service charge, surely that should be my legal adviser's responsibility to check that ( not that it applied in my case as the earlier period of the charged year was down to the freeholder )?

[Diana M]

Re: Leasehold Property Service Charge Query .....

Since you seem not to be a lone voice over the way the property is managed, why don't you and your fellow lessees set up a RTM (Right to Manage) company. It's your legal right.

That way you take control of the situation. I hate it when people spend my money without me having a meaningful input. Read this on how to go about it > http://www.lease-advice.org/advice-g...ght-to-manage/

On your second issue. you're right that your conveyancing solicitor is responsible for making sure that you (as buyer) don't inherit any service charge leftovers from the seller. However your solicitor doesn't have a crystal ball to know what lies ahead which cannot be predicted.

There's a protocol for conveyancing which includes obtaining the previous three years service charge accounts. These should indicate the average 'running costs' for maintaining and managing the building. The seller will be asked to sign a Questionnaire which includes any known future works or expenses. If there's a managing agent in place (as was the case with you) then they must complete those forms on behalf of the seller.

If your solicitor failed to do things by the book then you could have a complaint against him. If it's not resolved then you take that complaint to The Legal Ombudsman http://www.legalombudsman.org.uk/helping-the-public/

However as you say your particular issue has been resolved so no need to kick up a fuss.

Right to Manage can be hard work but at least you will feel involved with everything.

Di

[Snoopy1948]

Re: Leasehold Property Service Charge Query .....

Thank you Diana M ..

You are of course correct that no one can have a crystal ball when it comes to new buyers having to pay deficit service charges that should have been the responsibility of the previous owner. I am now better informed for my next property purchase and will ensure those questions are asked. Thank you.