Service charge for period where we weren't owners

sarah69696pink

Hi All,
Hoping for a bit of advice....
We bought an ex-local authority flat in March 2016, which is managed by a housing associated. When we moved in our solicitor ensured the previous owner settled the service charges to date.
Since moving in we've paid our requested service charge each month.
We've now had a bill for an additional £500 to be paid, pertaining to charges for July 2014- Feb 2016. The management company say all bills are estimated and then worked out later in the year for the previous year. I understand that at the beginning of the year cost have to be estimated, however it seems quite late to me to be billing for costs from some time ago.
My question is - as we are now owners of the property are we liable for these costs? Or is there a reasonable amount of time they are meant to be have requested these for?
I don't understand why in March they did not bill the previous owner for these?
Thanks for any help
Sarah

G_M

Yes as the owner you are liable for all charges relating to the property.

But your conveyancer (or did you DIY?) should have ensured a mechanism for the sellers to pay. Typically where a service charge is estimated or unknown, the solicitor 'retains' a certain amount from the purchase price, which can be used to pay the service charge if needed, or released to the seller later if not needed.

sarah69696pink

Thank you. We did use a conveyancer and you've just reminded me that the seller refused to allow our solicitor to put retain any money just incase - so thanks you've answered that clearly I am liable.

I wondered if anyone knows is there a limit as to when costs have to be presented to owners? The management company tells me that last year there was a refund to owners of service chargers (which seems strange to me as I would have thought it would go into a sinking fund), however this seems even stranger to me given that some of the charges they are now asking me for date back to 2014 - surely these should have been recouped previously?

G_M

Debts can be claimed for 7 years.

If the estimated cost at the start of the year, and billed during the year (quarterly?) turns out to be an under-estimate, an additional charge is made.

If an over-estimate, a refund is made.

A sinking fund is entirely separate - it may or may not exist, but if so there is usually a separate amount allocated specifically to that, which obviously is fixed, not estimated.

It seems strange that your conveyancer did not fully explain all this at the time - when the seller refused to accept a retainer, you should have had the potential consequences clearly explained, and you should have had the opportunity to insist on a retainer. You have as much right to insist as the seller has to refuse.

sarah69696pink

Thanks - our conveyancer said the sale would fall through (the seller was being particularly awkward at the end) unless we agreed to go ahead without the retainer, she wasn't happy about it but said she felt confident that the charges each year had been either that billed our less so we shouldn't have any issues.
thanks so much for taking the time to explain clearly to us....I had better get paying!!

G_M

sarah69696pink wrote: »

Thanks - our conveyancer said the sale would fall through (the seller was being particularly awkward at the end) unless we agreed to go ahead without the retainer, she wasn't happy about it but said she felt confident that the charges each year had been either that billed our less so we shouldn't have any issues.
thanks so much for taking the time to explain clearly to us....I had better get paying!!

You could try passing the bill to the seller and see if you can get payment...... but don't get hit by late payment charges.