Can i get a service charge refund if moving house after paying 12 months upfront

PenMan123

Hi,

I am about to pay my service charge on my leasehold flat for 2017, however i have just accepted an offer and looking like we wont be in there in a couple of months. Do i have grounds for a refund? considering somebody else will own the property after we sell it.

Cheers

Timbosaurus

It's normal for the buyer to pay you a proportion of any ground rent or service charges, calculated from the day of completion, as part of the contract of sale.

G_M

As Tim says - no you can't get a refund, but you can add the pro rata cost to the sale price. This is normal practice and is agreed during the conveyancing process.

saajan_12

As far as the freeholders / management co are concerned, the 'owner' is a fixed entity and they don't get involved in you passing that baton on (as far as ground rent / service charges are concerned at least).

However you can agree privately with your buyers to pay you back for the proportion of service charges you have paid upfront. They may also request a retention incase any changes to the service charges are expected to prior years, as they would be liable to pay this to the freeholder / management co.

This wuold all usually be added to your completion statement.

glasgowdan

I've not heard of paying a year's service charge up front. If I were you I would pay a portion of it with a cover letter stating the new owner's details for them to bill the rest after the move date. No way I'd pay a year up front if I was moving.

NeilCr

glasgowdan wrote: »

I've not heard of paying a year's service charge up front. If I were you I would pay a portion of it with a cover letter stating the new owner's details for them to bill the rest after the move date. No way I'd pay a year up front if I was moving.

We give our residents the option of six monthly lump sum or monthly payments

From what our managing agent says this is quite common practice

OP. Worth having the conversation with the freeholder/managing agent?

G_M

glasgowdan wrote: »

I've not heard of paying a year's service charge up front. If I were you I would pay a portion of it with a cover letter stating the new owner's details for them to bill the rest after the move date. No way I'd pay a year up front if I was moving.

Depends what the lease says.

If it says payment is due annually in advance on 1st January each year, then witholding full payment could result in additional costs (eg admin charge/solicitors bill for chasing the arrears).