Management Company Dispute Preventing Sale

Armagreggon

I'm currently in the process of selling my flat. I've owned it for 5 years and moved out into private rented accommodation approximately 3 years ago due to a change of job forcing relocation. I let it out for the last 3 years but now I've settled down elsewhere I want to buy a new house where I now live.

It was on the market for approximately a year before I received and accepted an offer about 2 months ago. I gave my tenants their notice and about a month later I made an offer on a house which was accepted. My solicitor requested details of the service charge from the management company which takes care of the block my flat is in, let's call them BH, which BH totally ignored, despite numerous follow up letters, phone calls by the estate agent, my solicitor, me, my partner. We were due to complete last week and after 6 weeks of nagging them BH finally provided details of the service charge. Unfortunately there was one detail missing - where it requested info about how much money was held in reserve fund, this was marked as 'to be confirmed, still negotiating with previous management. Obviously the buyer's solicitor would not accept this so asked for more details.

Now when I bought my apartment new, the block was managed by the leaseholders, RA ltd, but 9 months ago they sold the lease to another company, AL5, and appointed BH to manage the property at the same time. After further discussion with BH, it transpires that there should have been £20k held in the reserve fund from the service charge paid to RA over the 4 years it was managing the property however when AL5 bought the lease, this £20k was not transferred to the new management company BH.

BH have said they are negotiating with RA over how much should be transferred but essentially RA are just ignoring them. After speaking to RA, we were told by the director that when the lease was sold 'RA were in global restructuring and all funds were transferred to Yorkshire Bank during their administration and it is nothing to do with RA anymore' . There is no evidence on companies house that RA have ever been in administration and BH have said to us that RA are talking rubbish in order to buy more time, and that we shouldn't expect a resolution any time soon.

Now there are 85 flats in the development, so £20k between 85 flats works out at around £235 per flat that is missing. We have offered our buyer £500 to cover him against any future expense due to the missing funds and any hassle. However in the meantime the buyer's solicitor have contacted the lender (without giving away any details) and the lender have said under no circumstances would they give a mortgage where there is a dispute between 2 managing companies.

This all seems silly over what is £235. Our buyer is keen to move in, we're keen to sell. We've already spent £2000 in solicitors fees and surveys on the new house but we appear to be in a situation where we are unable to sell our flat because the previous management, RA, are being total d*cks (excuse my french) and refusing to pay the money they owe/burying their head in the sand. We are going to lose our new dream home, the money we've spent so far and the flat is sat empty costing us £600 a month in mortgage. :eek:

Has anyone had a similar situation before or any recommendations of how we might be able to progress matters?

agrinnall

I'm not sure that you'll be able to speed up the resolution between the managing companies, so all you can realistically do is suggest solutions to your buyer. You've tried one which has been rejected, another might be for the buyer to find a mortgage from another provider who isn't bothered by the dispute, but that would cost them money which they would probably want you to cover. The alternative is to put it back on the market and declare the dispute up front so that buyers are aware before proceeding to far down the track.