Getting retention back from solictors

m0bov

Hi all, we completed in March of last year, I was selling my LH flat and buying a share of freehold house.

During the process we had to pay £250 retention for any outstanding money owed to the management agents or freeholder.

I noticed last month I never got this money back, I was not aware of any outstanding bills either.

I have contacted my sol but its been 3 weeks now and they are still waiting to hear from my buyers solicitor. Anyone able to explain the process? Should I have heard something since if I had'nt chased I would have been out of pocket!

Cheers

mrschaucer

If you are the vendor, then what usually happens is that your solicitor holds on to some money which can be claimed by the buyer if there is a shortfall when the final accounts for the year come in. It really depends on when the accounts are finalised - the buyer/buyer's solicitor can't claim until they know the final score, and neither can you get your money back until everybody agrees what is "owed" or not. This is probably what your/their solicitors are checking at the moment. You will not be aware of "outstanding bills" as you are no longer the leaseholder and will not be entitled to this information - all bills etc are now sent to the buyer.

m0bov

Ok, the year end was Dec 2017.

mrschaucer

I *think* the management company are allowed 6 months after the "year end" to produce final accounts and get them signed off, so your timing might be spot on!

InterestedParty2018

The answers above are correct - to add:

(This is the "textbook" process, but there are variables when there are contentious matters.)

- You sold mid-service-charge year.
- This year ended on 31 December 2017.
- The Freeholder/Management Company have to circulate the service charge accounts to (current) flat owners within 6 months of the financial year ending (known as the 18m month rule).
- Your solicitors *should* have a diary note to follow this up.
- Rarely does the actual spend equal to the budget. Therefore in majority of cases there is a surplus or deficit on the service charge. Solicitors will calculate how much is due from you (and therefore your retention) and how much is due from the new owner. I believe daily pro-rata calculations are used.
-Any unused retention is released back to you.

Timing wise - now is the right time to be chasing. Any earlier and you would have simply been fobbed off with "wait until the accounts are completed".