Who's responsible for previous year's service charge deficit?

meduk1

When I sold my flat the buyers solicitors insisted that I paid them a holding deposit to cover this exact situation. When the years accounts were then published 6 months later by the service company and this confirmed no additional costs then sent this back to me.

It sounds as if your solicitors should have also done this.

moromir

What you need to do in the first instance is read the lease in detail -

Service charge debts are normally inherited by the new Lessee whether they occurred in a period before their ownership or not.

Your Solicitor should have;
- asked for the last three years accounts (to see whether there has been any previous deficits, or whether they're skirting close to the wire on funds)

- asked whether the service charge account was paid up to date (this is only the amount that the management company billed the lessee at the time),

- asked whether there was likely to be a service charge deficit.

Only then would it have been reasonable to consider whether holding a retention was proportionate.