Service Charges - Should an estate agent know them pre-sale?

indie_ct

Hello guys,

This is my first post, but I've been reading the forum for a while :beer:

If you'd be kind enough, I'd like to ask for some advise?

I'm currently buying my first apartment in the Canterbury area (CT1) and have bumped into an unpleasant situation at the point of contract.

At long last we're ready to exchange, but that's not gone quite to plan because the service costs outlined on the lease are actually around a grand a year more expensive than I was quoted when I made my initial enquiry.

Of course all I have in writing is the current cost for 2017, rather than what the estate agent told me prior.

As such I understand that the service cost itself basically will not change. It is also likely that 2.5k per year is the going rate in my area.

So, what exactly am I trying to establish?

There is a lot of principal at play here.

Fundamentally I am trying to understand who is responsible or at least what is reasonable to expect from the various people in the chain.

When questioned about the above, my conveyancer basically claimed that an estate agent would not normally know about monthly service charges. However that seems like utter nonsense. You only have to look looking at Rightmove to see 10s of listings mentioning expected service charges (directly on the advert).

Not being happy with the answer, I ended up phoning another agent in my area. In a nutshell they confirmed that the agent responsible for advertising the property would normally know such specifics 'at the point of instruction'. The phrase 'due diligence' was used.

FWIW for those that care to read this far down - I'm aware this is a bit of a TLDR situation - the property was also advertised with an allocated secure parking space, which is doesn't actually have. Luckily I have the original printed brochure for that.

Regarding this matter there was no apology or admitting wrong doing. It took me some time to get over this and it was eventually grounds for a small reduction.

To conclude, it seems that estate agents are subject to no regulation and have basically no responsibility for the quality of the information they provide. I also have the distinct impression that the conveyancer (who was recommended by the estate agent, but AFAIK is supposed to work for me!?) might actually be telling porkies to protect said agent :mad:

Cheers,

indie_ct

Surrey_EA

Typically an EA is reliant on the vendor to provide them with the correct information regarding such information, and therefore they are only as good as the information they are given.

It is then up to your solicitor/conveyancer to confirm the charges relevant to the property, and they should be supplied with a Leasehold Information Form (TA7) by the sellers solicitor/conveyancer, and I would expect this information to be provided very early in the process. Your solicitor/conveyancer would then make enquiries with the freeholder/managing agents to confirm the position regarding charges and enquire as to whether any increases were planned.

I am surprised that this information is only being supplied to you by your solicitor when you're at the point of exchanging contracts.

Several pieces of legislation cover Estate Agents, so there is plenty of regulation, however it may be said that it is often inadequately used.

saajan_12

Anything the EA tells you (either in an advert or in response to a question) is based on whatever they were told by the vendor. They do not guarantee its accuracy, it is just the best representation of the facts as they know them. A buyer has to do their own due dilligence on the term of the lease (via solicitors, surveyors etc). It was your choice (oryour solicitors) to check the lease so late in the process.

AS in most industries, an advert is just 'as far as they know' and is not legally binding. You may potentially take action if they grossly and intentionally misrepresent but this si a difficult thing to prove. With the new knowledge you're going ahead with the purchase anyway so what are your losses exactly?

eddddy

indie_ct wrote: »

As such I understand that the service cost itself basically will not change. It is also likely that 2.5k per year is the going rate in my area.

The service charge can change and there isn't really a going rate for service charges.

Essentially, the freeholder (or their agent) has to do everything the leases say they must do. And then the cost is split amongst the leaseholders as a service charge.

So...

If the lease says the freeholder must maintain large communal gardens, maintain a lift, employ a concierge - the service charge will be high.

If there is no communal garden, no communal areas etc - the service charge will be low.

If the communal hallway needs painting one year, the service charge might be higher that year than other years.

So you should look at the service charge budget for 2017, to see if there are any 'one off' type charges.

(It could be that the EA was given service charge figures for 2016, which may have been lower, because there were no 'one off' charges.)

Guest101

Should the estate agent know the service charge - No. (they don't work for you as the buyer either)


Should you use the conveyance recommended by the agent? - No.

AlexMac

Read my post #14 in reply to a similar Q here on the forum at

https://forums.moneysavingexpert.com/discussion/5647441

indie_ct

Thanks to all replies above.

Each perspective has helped me to understand the process in more detail.

I always understood the responsibility falls on my shoulders, but I hadn't banked on various people in the chain being so nonchalant about what are not small details.

Having not done this before I didn't really know when to expect confirmation of such things.

Now I can see it was naive of me to rely on the EA's information. Regardless of their legal obligations, I don't think they were particularly helpful because as a buyer I had to make an offer based on pre-sales info.

Anyway I think what I needed I got from your thoughtful replies and the link at the end.