Will I have to pay management company arrears?

lottylenya

I'm looking to buy a flat which is repossessed from a previous owner. The previous owner has also amounted 2 years of unpaid fees to the management company of the building... Will I in any way be responsible for footing the bill for his arrears as the new owner of that flat?

G_M

Yes, as the new owner you will be liable for these fees.

Normally you would insist the seller pays them off, or deduct the fees from the purchase price.

In the case of a repo, you will simply have to factor the fees into your calculations when deciding how much you are willing to pay for the flat.

ValHaller

G_M wrote: »

.... In the case of a repo, you will simply have to factor the fees into your calculations when deciding how much you are willing to pay for the flat.

I agree with the above. The key point is were you made aware of the arrears before making the offer? If you discovered the arrears after making the offer, you should advise the vendor that your offer was inclusive of all liabilities accruing to the property and knock them straight off the offer price unless the vendor agrees to clear them.

Messa

I purchased 3 apartments from a bankrupt investment company all with outstanding arrears from various sources, my solicitor had it written into the contracts wording to the affect that previous debts were null and void and it was accepted by the seller.

moromir

Messa wrote: »

I purchased 3 apartments from a bankrupt investment company all with outstanding arrears from various sources, my solicitor had it written into the contracts wording to the affect that previous debts were null and void and it was accepted by the seller.

My bolding. With all due respect, of course the seller accepted those terms.

Obviously the seller can't actually 'null and void' any debts they owe to the management company! They may pay them off... perhaps this is what you mean!

Messa

moromir wrote: »

My bolding. With all due respect, of course the seller accepted those terms.

Obviously the seller can't actually 'null and void' any debts they owe to the management company! They may pay them off... perhaps this is what you mean!

Yes you are correct, re-reading it I see how daft that sounds. It was agreed that all debts are settled/assumed by the seller prior to sale.

propertyman

This so more complex than is said.

Repo properties are routinely sold on the basis that any outstanding rent or service charge is taken over by the buyer. Many lenders and banks will pay what is owed up to that point and therefore it is often only the year end adjustment ( the landlord/agent spent more than was budgeted).

While leases granted after 1-1-96 are not liable for that amount under the law, the contract in fact can void that, if you agree, and make you responsible as the seller will still be liable in law wihtout that agreement.

Of course the repo company will want to wash their hands of it so they offer it "warts and all" on a take it or leave it basis.

Buyers should therefore want to know by way of enquiries of the agent or LL
1 What is outstanding
2 Is there an expected overspend for the year, or past years

and adjust the price accordingly as in most cases they are liable for both 1 and 2, and if you don’t like it they will re offer to someone else :eek::)