Service charges

Tsavorite

I'm considering buying a leasehold flat and was just wondering how the service charge works. In a block of flats built about 5 years ago and managed by an agent, do you usually pay the service charge annually or monthly?


If it's annually, do you normally have to pay a whole year when you move in, or if the current owner has already paid, do they get a refund of it and the new owner pays the remainder of the year? I know it may differ from agent to agent but just wondered if there's a common system.


Also, I know that the risk transfers to the buyer on exchange, so normally you'd insure a property from exchange. If the service charge includes buildings insurance, would I have anything to organise on exchange?

G_M

Tsavorite wrote: »

I'm considering buying a leasehold flat and was just wondering how the service charge works. In a block of flats built about 5 years ago and managed by an agent, do you usually pay the service charge annually or monthly?
Read the lease. Maybe monthly, often quarterly, sometimes anually.


If it's annually, do you normally have to pay a whole year when you move in,
If it is outstandng, you'd need to pay whatever is owed up to the next annual payment date.
or if the current owner has already paid, do they get a refund of it and the new owner pays the remainder of the year?
if seller has paid in advance for a period beyond the Completion date, they would get a refund (worked out pro rata for each day, and the purchase price would be adjusted)
I know it may differ from agent to agent but just wondered if there's a common system.
Nothing whatever to do with the agents.
The conveyancers would work out who owes what, based on the lease, and state of the account (payments made/owed).

Also, I know that the risk transfers to the buyer on exchange, so normally you'd insure a property from exchange. If the service charge includes buildings insurance, would I have anything to organise on exchange?

If the buildings insurance is paid by the freeholder/managing agent, the buyer need do nothing about insurance either before or after Exchange or Completion.

Contents insurance will be the occupier's responsibility.