Apportionment of Ground Rent/Service charges

Lokolo_2

Does the apportionment of Ground Rent/Service charges need to be calcuated and paid before completion? I am a FTB who has exchanged contracts last Friday however my solicitor has not received the amount of the apportionments that I need to pay, just wondering if this would delay completion as I am due to complete on Friday!? :eek:

BlueIsTheColour

Yes, sellers solicitor should let your solicitor know. I'm just selling my flat, hopefully competing tomorrow & my service charge has been apportioned to end of June as that is when the current quarter expires. Same with the ground rent although that's apportioned to end of August as that is paid biannually.

So my buyer has had to pay about £300 to cover his service charge costs to end June & ground rent to end August, his liability kicks in day after completion.

I'm then receiving some of those monies as credit for what I've already paid & my solicitor will pay the service charge for him. She said completion can't take place if any due accounts are outstanding at that time, hence the use of apportionment.

Hope that makes sense? Essentially you'll get asked to pay for the period the day after completion to either quarter or biannual period end.

BlueIsTheColour

Sorry should have said that my buyer has had to pay this in addition to the agreed asking price.

Lokolo_2

BlueIsTheColour wrote: »

Sorry should have said that my buyer has had to pay this in addition to the agreed asking price.

Thank you, that is very clear, I knew it was in addition to the agreed price and am ready to pay it, just annoying that it seems to be taking so long as I have chased my solicitors and they have chased the vendors solicitors but not received the information they need! The funds are on the way to be in place by tomorrow already so I cannot afford to delay completion for something like this!

EA thinks it should have been done before exchange but doesn't seem too worried about it!

BlueIsTheColour

Well it was only done this afternoon for my buyer & we're due to exchange and complete tomorrow haha!

Your solicitor could give you a ballpark as they'll know how much service charge & ground rent is so could work it out roughly.

My solicitor said it couldn't be calculated until there was a definite day for completion as they obviously need to know that to work out how much.

I'm sure yours will all be fine...

Lokolo_2

BlueIsTheColour wrote: »

Well it was only done this afternoon for my buyer & we're due to exchange and complete tomorrow haha!

Your solicitor could give you a ballpark as they'll know how much service charge & ground rent is so could work it out roughly.

My solicitor said it couldn't be calculated until there was a definite day for completion as they obviously need to know that to work out how much.

I'm sure yours will all be fine...

Thank you for the reassurance, hopefully it does all go to plan, will be calling the solicitors again tomorrow if I don't hear from them by early afternoon!

I am ready to pay whatever it is, just frustrating that it's something I don't have much control over.

AlexMac

If the other side delay providing the info, the solicitors might suggest a 'retention'? Last time I bought a leasehold flat, the service charges (which has been paid in advance by the vendor on the basis of an estimate by their freeholder) were apportioned before completion, as is usual. But then, a couple of months after my February completion, the Freeholder (a local authority) recalculated the 'actual' Service charge in April at the end of their financial year, and sent me a bill for the extra; a couple of hundred quid. I mentioned this almost in passing to my lawyer, who said it was worth a word with the vendor's one. I was delighted to discover that the vendor's solicitor had retained £100-150 or so, as this was a common occurrence; and they passed this on to me without any added fees!

Lokolo_2

AlexMac wrote: »

If the other side delay providing the info, the solicitors might suggest a 'retention'? Last time I bought a leasehold flat, the service charges (which has been paid in advance by the vendor on the basis of an estimate by their freeholder) were apportioned before completion, as is usual. But then, a couple of months after my February completion, the Freeholder (a local authority) recalculated the 'actual' Service charge in April at the end of their financial year, and sent me a bill for the extra; a couple of hundred quid. I mentioned this almost in passing to my lawyer, who said it was worth a word with the vendor's one. I was delighted to discover that the vendor's solicitor had retained £100-150 or so, as this was a common occurrence; and they passed this on to me without any added fees!

Thank you for that, I will certainly ask my solicitors about it. All packed and ready to go, have booked time off especially for this so it will be very stressful if it doesn't go to plan as I have a busy week at work next week!

Lokolo_2

Paid the amount due over the phone just a few minutes ago, thanks all for your help!