Advice please re: service charges when selling leasehold flat

l_i_s_a

Hello everybody for the first time!

I wondered if somebody could clarify something for me please?
I am in the process of selling my leasehold flat (share of freehold) and was wondering about the situation with the service charge payments upon completion....charges for the year run according to the financial year and I hope (!) to be completing before this ends. I currently pay the service charge on a monthly basis throughout the year (i.e. invoice in March for April 06 - March 07 which is then paid throughout the year split equally each month), although some others in the building may pay the whole sum up front and we are able to choose this. I have received notification from the managing agents that all payments up to March 2007 will need to be paid by me before/upon completion.
Is this correct? That I will be paying for service charges for the rest of the year after I have sold?
If so, this would be very unlucky if you completed a sale in, say, May of the year and had to pay the whole lot through to the following March!:eek:

It would be great if somebody could confirm this for me please?

thanks
Lisa:A

clutton_2

ask your solicitor, it will depend on what is in your lease. I suspect that even if you do pay until next year, then your solicitor may ask for the balance to be reimbursed to you by the vendor. how much is it for a year ?

l_i_s_a

Thanks Clutton. It is just over 1000 pounds per year. I will ask the solicitor on Monday. They have said that failure to settle account will delay registration of the new owners at the land registry. If this is the case then I do not mind paying it up front but hopefully I will get it back as It does add up to a few hundred pounds. If all service charge accounts became fully payable at the start of the year then am I right in saying this could cause all kinds of problems...such as people having to pay a full 1000 pounds at the start of a financial year and then completing soon after! And also maybe some buyers delaying so the new years accounts becoming payable so the seller has to pay it for the year!

thanks
Lisa

zzzLazyDaisy

Hi, I had a similar situation when I sold my flat.

My solicitor arranged with the buyers solicitor for their share of the maintenance fees to be paid on completion, at the same time as the purchase price. She then sent the money by bacs transfer to the managing agents. There is a fee for this (£25 I think) but it saves you finding the balance ahead of time.

Anyway, however it is done, your solicitor should make sure that the buyer pays for their part of the year. However, you do need to get onto it, because the buyer may not have factored that into their budget, especially if they were planning to pay the fees monthly.

l_i_s_a

Hi LazyDaisy,
Thanks that's really useful, it is good to know that I am not due to pay for service charges after I have completed! I will make sure that we are able to sort this out one way or another before completion. It is good to know this before I get to exchange/completion stages as at least I can prepare. I have a feeling that my buyer has not factored this in to his budget as I can imagine he will be wanting to pay monthly as a first time buyer. I was certainly not aware of this either. It seems it could be a substantial cost for either the seller or the buyer, depending on the time of the year! I suppose if I paid it up front the buyer would have to redeem me, and if not he would have to pay the managing agent so no way of helping there really.

thanks
Lisa