Previous owner's debt. desperately seek advice.

poorcatt

Hi Guys, We are desperately seeking advice. We bought this flat on Dec 2007. We received a letter yesterday from city council saying that previous owner received a housing assistant grant around 4000 pounds for repairing the roof in 2005-2006. The grant is subject to he will live here for 10 years. But he sold the house to us and moved to nursing home 2 years ago. Now city council contact us and asking this 4000 pounds back.

The benefits agreement was between the previous owner and the city council. We know nothing about this when we bought the flat. We think we have paid the price for the flat with the new roof and we should be responsible for the unpaid debt of the previous owner. The city council staff is confused and shockingly told me that they do not who should pay the money back to them and if they can not recover the cost from the previous owner they maybe ask us to pay for that! Should I pay for that?

Can anyone give any legal advise will be highly appreciated. We are so worrying about this since we need lots of extra money for the new born baby and really can not afford that. Thanks.

Jowo_2

Contact Shelter for free expert advice, this seems complex.

My understanding, like yours, is that any agreements made between parties are strictly between the service provider and the individual.

When new tenants move into a new rental property, they are not held responsible for previous tenants who may not have paid the Council tax, energy bills and so on.

I am not qualified in law but I am baffled as to how the council could hope to prove in court that you are responsible for repayment of this grant when you neither applied for, not received it.

I am also baffled as to how your solicitor did not uncover this during the conveyancing process as I understood that local authorities often place a charge against the deeds to flag up any breaches of their policy.

Where is this property? Did you buy it from a relative under Right to Buy?

I know in Scotland that it is possible for incoming owners to be responsible for arrears for repair expenses in common parts of the property if a notice of liability is placed against the property for work done under the previous owner but again, this should be flagged up during the buying process and I'm not sure how this works for grants (as opposed to factoring fees).

poorcatt

We are in Gloucestershire. We did not buy it from a relative. The previous owner did not mention anything about the grant. All they and the agent told me is that the roof had been done a year before so we do not need to worry about any extra cost for that. That is one of the selling points when we bought it. Also when contact the previous owner through the agent today he admit that he knew this situation and he informed the city council when he sold the flat. He told me that city council agreed to waive the cost for him. He can not understand that why the council do this. He promise that he will deal with the council.

If finally we need to go to the court, should I request that all 3 parties should be involved in this case on the court?

BitterAndTwisted

Please don't worry about court, that's a long, long way down the road and it's not really likely that it would come to that. If the previous owner says that he'll sort it out with the council then I reckon that's what will happen, so try not to worry.

Antispam

Usually these grants are done by means of a charge on the house when it comes to sell it it can vary depending on which council and or length of time the previous person resided in the house after the works was done

I am surprised your solicitor didnt find this out

Jowo_2

poorcatt wrote: »

If finally we need to go to the court, should I request that all 3 parties should be involved in this case on the court?

Sorry, didn't mean to imply that the council would take you to court, merely theorising that if they did this as a last resort, they could not possibly offer any proof as to your liability (the onus being on them to provide evidence).

To me, it sounds like its an issue between the council and the previous owner that is already in the process of being resolved and hopefully the previous owner has documentary proof that the council waived the charge.

Perhaps, if by law, it is a direct issue between the previous owner and the local council, your solicitor had no need to inform you of the position since you would not have had any liability for the roof expenses. Wouldn't hurt you to check with them given the threats made by the council - perhaps your solicitor can offer you the reassurance you need and can explain why it wasn't brought to your attention during the sale.

Richard_Webster

Grants are normally registered as local land charges and should be discovered by a local saerch and therefore your solicitor should have spotted it. If he didn't and you get sued for it (as you are likely to be liable) then you pass the liability on to the solicitor for not warning you about it. Normally the seller's solicitor will be asked to pay it off from the sale proceeds.

If it is an ex-Council flat then it is possible that the work was done by the Council as landlord and they raised a maintenance charge against the previous owner to pay it and again this should have been revealed when you bought.

I would certainly contact the solicitor who acted when you bought to fidn out about what the search showed and if ex-Council what the Council said about outstanding liability for maintenance charges.

poorcatt

Thanks very much for every reply. I will update later today.

princeofpounds

Richard is basically right. It's highly unlikely that you will ultimately be responsible for this, but it might be a bit of work to find out who is.

It could be the previous occupier, because of their contract with the council. Or it might be because they lied to you or forgot on their information form.

It might be your solicitor, if they failed to pick up a direct charge or outstanding maintenance fee.

The thing to do is establish whether the council should be pursuing someone else, or you should be pursuing someone else. That requires specific information on the details and some expert knowledge most likely.

poorcatt

We have received a phone call from our solicitor, who assured me this should has nothing to do with us and she will talk to the coucile. Also we received the news from the previous owner with the similar feedback. So it looks like temporarily we do not need to worry about it too much.

Again thank you so much for your advice. I will update later if I have news.