Vendor left us with £5K management fees

Hackneyboy

My solicitor recently informed me that the previous owner of our flat left owing £5000 to the management company.

The management company are now pursuing us for the money and refuse to open a new account in our name until the money has been paid.

Does anyone know if we are liable for the fees?

Surely our solicitor should have checked that the management account was up to date before completing contracts?

Rick62

I know when I sold a flat I had to have everything reconciled with the landlord and confirmed to the lawyer before we completed.

How have you bought the flat, I thought that the freeholder had to approve the transfer of the lease as part of the process. The Freeholder should at that point refuse to agree the transfer until his account is settled?

MarkyMarkD

I think your solicitor should definitely have checked if there were any obligations. He may have asked the vendors to confirm that there were not and they may have lied. You need to go back to the solicitor and get him to sort it, IMHO.

Hackneyboy

Our solicitor has written to the vendor's solicitor. He's included the following line:

Upon completion you claimed apportionments for service charge and therefore quite clearly it is your responsibility for clearing the account. There are arrears of £5,000 for which your client is responsible for.

Our solicitor has told us that we're not liable but I fear that doesn't necessarily mean it's going to get resolved quickly.

Jeewhizz

I would point out to the freeholder that the contract is between him and the old owner. If he won't set you up an account, then i would make sure that when you do eventually get setup, he doesn't backdate any payments because he initially refused...

epz_2

ask how much the service charge should be, put the cash into some bank account and wait it out. the management company has no chance as long as you solicitor has done their job properly.

it looks like they have realised they have no chance getting the cash out the previous owner and rather than taking them to court are trying to preasure you.

whats the worst that can happen, you will still have power and telecoms, its just the other residents will have to subsidise you untill they agree to let you pay your share.

basicly you wouldnt pay a gas bill the previous owner ran up, their debts which you never agreed to.

silvercar

If the freeholder holds out and refuses to register the new people as leaseholders until the debt is paid, the mortgage company are not going to be happy. At the end of the day the mortgage company could pay over the £5,000 in order for their interest to be registered (ie you registered as the leaseholder). This £5,000 would then be added to your mortgage!

I have seen this happen, so don't dismiss the possibility. Someone has screwed up in not ensuring the debt was cleared. If the previous leaseholder wasn't able to clear the debt, money should have been retained from the purchase price to pay it.

Your solicitor will now try and put pressure on your seller's solicitor to clear this debt.

Doozergirl

Your solicitor should have checked this and it's a basic error if they haven't done. They need to write to the managing agent with a list of queations, a very important one being whether there are monies outstanding.

I'd be going through their complaints procedure and asking them to settle this bill themselves until such time as your vendor reimburses them, I don't think it should be your problem.

david29dpo

i recently bought i repossessed flat where the last owner left owing £££££ to everyone. i my case, the bank had to pay the management fees up to when i bought it. you cannot be responsible for this fee. see you solicitor quick!

Richard_Webster

Your solicitor should have checked this and it's a basic error if they haven't done. They need to write to the managing agent with a list of queations, a very important one being whether there are monies outstanding.

I'd be going through their complaints procedure and asking them to settle this bill themselves until such time as your vendor reimburses them, I don't think it should be your problem.

Your solicitor should have made sure that the seller had provided up to date information as to the management charges. If the seller's solciitor could not produce a receipt then he should have been asked to undertake to pay any outstanding charges out of the sale proceeds.

If he didn't give that undertaking then your solicitor might have a problem.

I always seek to insist that a seller's solicitor gives an undertaking or I check the amount outstanding direct with the Landlord/Managing Agents. If a seller's solicitor gives an undertaking then it is up to him to check the amounts involved first - as solicitors' undertakings are very solemn things...

If they did give such an undertaking then your solicitor can require the seller's solicitor to pay... However the tone of your solicitor's letter implies that they didn't give an undertaking but simply claimed apportionments on out of date information.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

plane_boy2000

I think this is a drop off on the part of your solictor - he should have ensured that all was well before he commited you by exchanging contracts. I know in past experiences with leashold it has all been checked out and calculated down to the day who owes what service charge.