Solicitor Invoice for Leasehold Purchase - Advice Required

Dodgybloke

My sister has just had exchange of contracts occur with the purchase of a flat with leasehold. The purchase price was below stamp duty boundary. I need advice what some of the following charges mean (I've only done freehold).

The firms professional charges 675.63
Apportionment contribution by buyer 500.00
Stamp duty on share transfer 5.00
Management Co share transfer fee 35.25

Disbursements

Local search 153.89
Drainage and water search 25.86
Environmental search 39.00
HMLR priority searches 8.00
HM land charges 2.00
Land registration fee 150.00
Lease Notice of assignment / charges fees 11.00

All the disbursements look fine, but what on earth is "Apportionment contribution by buyer"

Any help will be welcome.

kjl26

Might it be her part of the outstanding service charge? You need to settle that on completion.

Bossyboots

I always understood apportionments to be the share of bills already paid by the seller that fall into the period of ownership of the buyer.

For example, if the water rates were paid up for the whole year but the buyer then moves in after three months, the buyer would be responsible for 3/4 of the water rates and this is refundable to the seller. There would also possibly be things like service charges but I must admit the actual figure seems very high. It may be though that a major repair has been done to the property which the seller contributed to and wants some of it back as they will not get the long term benefit.

I always advise people to ask for a complete breakdown of the apportionment figure and am always surprised that bills are sent out with just the one figure on without the client being giving full details of what they are.

kjl26

Our apportionment for the service charg/ground rent was estimated by the solicitor at £300 when we completed in Sept 05. The account was actually in arrears and the management company wouldn't do their side of the paperwork till it was all paid - they bill in June for the period Jul-Dec and the service charge is approx £1100p.a. plus ground rent of £50p.a. So the vendor paid the other £300 or so.
So if your sister's freeholder runs a similar accounting year, the £500 might be to cover nearly six months of ground rent/service charge, which might be feasible?
NB our solicitor underestimated by somewhere around £50, can't remember the exact figure.

Dodgybloke

My sister phoned the solicitor as I suggested. The apportionmant is to do with the service charge with the management company. Thanks for the reply though.

hazeyj

:A Hiya please be aware that you will own a share in the management company (thats why you paid the stamp duty. The management company then employ a managing company. Effectively you run the building so you have more rights than a normal leasehold. You tell the management company how to sepnd the sevice charge funds. I suggest that you become a director of the management company when you complete. Hard work but you will reap the rewards. Also the apportionment charge does sound high. I would ask to see a detailed breakdown or call the managing company direct. They should tell you this info.