Gifting property and service charge issue

Farrella

Hello,

I'm in the process of gifting my flat to my son, who already lives alone in the property. We're in the middle of a service charge dispute with the managing agent, so there are arrears that I refuse to settle on principle and they don't seem to be chasing.

I know that if I'm selling the flat to a stranger, the buyer's solicitor would make sure there are no arrears before completion. However, if I'm gifting the flat, could the freeholder or managing agent hold up the gifting process because of the service charge dispute?

Thanks for you help!

ps: I will pay off the remaining mortgage before the gifting process, so the flat will be mortgage free.

G_M

I believe that a condition of many leasehold Title's registration is assignment of the lease to the new leaseholder. Normally this cannot be unreasonably refused (though can be charged), but if there's an ongoing dispute that assignment could be witheld.

see also

http://www.theguardian.com/money/2012/jul/06/unregulated-admin-fees-hit-leaseholders

Farrella

I see. So if I understand correctly, the freeholder and managing agent will definitely be involved and will almost definitely insist on settling the service charge, even if it's just gifting (i.e. no buyer's solicitor) due to the reassignment of the leasehold's title.

I guess it'll be difficult to find a way of getting out of having the managing agent making me pay the full arrears without settling the dispute over the contested charges....

G_M

Surely even aside from your wish to transfer the property it is worth settling the dispute? Do you really want it hanging about for years?

edit: sorry, I mean 'settling' in the everyday usage of the word (resolving) rather than the legal sense (paying).

Farrella

I'd love to settle but the managing agent refuses to! Basically we had a new agent taking over from an old agent, and the new agent says they can't adjust any balances that was handed over by the old agent, even if there's a good chance those balances were wrong...

They've charged me over £1000 more than they should so I don't want to pay it, but I think I'll have to if I want to gift the property!!!

eddddy

Farrella wrote: »

...
Basically we had a new agent taking over from an old agent, and the new agent says they can't adjust any balances that was handed over by the old agent, even if there's a good chance those balances were wrong...

Just to be clear - they mean they don't want to adjust any balances that were handed over by the old agent.

But, as you're realising (and as they almost certainly realise), they have you 'over a barrel'.

If you want to fight, one solution might be to pay the disputed £1000 under protest, transfer the flat, then claim the £1000 back through the small claims court.

Farrella

Huh...so there's really no way to argue against service charge

I don't think I've ever met any of the people who "manage" our building, but we pay them £1600 every year. If only we could manage the building ourselves.