Apportionment

ianbeale_steeplecocque

edit: I found a service charge statement amongst the attachments my solicitor sent me, showing that the seller claimed apportionment for charges he never paid - https://i.imgur.com/41nwk6I.jpg



I bought a flat last year and moved in on June 1st. When buying the flat, I paid the seller apportionment fees for service charges, ground rent and buildings insurance, but halfway through July I got a bill for "six monthly in advance" ground rent from March 1st to August 31st of £337.61.


I called to question this as I'd already paid apportionment, and they said I would have to take this up with my solicitors, so I just paid to avoid a late payment charge. I've spoken to my solicitors since, but they can't get hold of the seller to get proof that he did actually pay, but considering I haven't been billed twice for the ground rent or insurance, I'm inclined to believe he definitely paid what he claimed apportionment for.


I called the management company back, and they told me that they don't have the previous owner's records any more because he'd moved out, and then seconds later said actually they did, and the records said he hadn't paid. If he hadn't paid, why did they only send the bill in July, and not a single letter about late payment. It's pretty obvious that the management company are lying but my solicitors can't get in contact with the seller to get proof that he actually paid, as I'd need something like a bank statement for proof.


What are my options? The management company are obviously lying here but I have no proof, and it seems my only option would be to take both the seller and the management company to small claims court. At the very least, I am due back the 92 days from March 1st to when I moved in, which comes to £168, but whoever is in the wrong, I'm entitled to the full £337.

eddddy

Presumably, you've double-checked your completion statement to make sure the seller is claiming they've paid the ground rent...

If the completion statement confirms that, as you say...

• either the Management Co has made a mistake, and charged twice - so owe you a refund of £337.61

• or the seller made a mistake in saying that they had paid the ground rent - so they owe you £337.61

So you need to gather evidence to find out who's at fault - and decide how far you want to progress it.

ianbeale_steeplecocque

I have the completion statement which has the service charge, ground rent, and buildings insurance on, but obviously that's not proof that he paid it, just that he claimed apportionment for it.


The problem is that my solicitors can't get hold of the seller to get proof, since all I need is a bank statement showing he paid the amount. On the one hand, my solicitors (Legal Zoom) were absolutely useless - the sale got held up about 2 months because of their incompetence, so I'm not sure if they've even genuinely tried. But the management company's changing story and sending this as a fresh bill, not a 4-month overdue reminder, makes me think they're lying.


If my solicitors don't get proof, is small claims court my only option? I'm going to ask for a refund of the 92 days before I moved in because whatever happens, that's not my responsibility.

eddddy

ianbeale_steeplecocque wrote: »

If my solicitors don't get proof, is small claims court my only option?

Assuming you told the management co that you were paying under protest, you may be able to take them to a tribunal...

See: https://www.lease-advice.org/advice-guide/application-first-tier-tribunal-property-chamber/

ianbeale_steeplecocque wrote: »

I'm going to ask for a refund of the 92 days before I moved in because whatever happens, that's not my responsibility.

No - unfortunately, it doesn't work like that.

A ground rent or service charge bill has to be paid in full by whoever owns the flat at the time the bill is issued.

That's precisely why solicitors do apportionment when you buy/sell.

AlexMac

Hopefully youll resolve this, but...

A decent solicitor would have demanded a statement from the freeholder evidencing service charges due , paid and outstanding.

Mine does; in fact last time I bought, in the February, a Bill arrived after the April 1st year end with an adjustment of a couple of hundred quid, because although the apportionment had been done, that had been based on an estimate and the policy was to send final bills based on actual spend.

I was delighted to discover that, unbeknownst to me, my lawyer had kept back a retention for just such an eventuality! Result.

So if it was just that ýour solicitor screwed up you might have to chase them... or more likely swallow it, learn the lesson and choose a better one next time?

ianbeale_steeplecocque

eddddy wrote: »

No - unfortunately, it doesn't work like that.

A ground rent or service charge bill has to be paid in full by whoever owns the flat at the time the bill is issued.

That's precisely why solicitors do apportionment when you buy/sell.

How can they send a bill "in advance" 4 months after it was due, though? Surely that means they could send me any outstanding bills since the flat was built 10 years ago and if I'm the current owner, that means I'm responsible?


The completion statement that I have includes the apportionments I paid, but not proof that he actually transferred any money. I'm assuming that this isn't really proof enough to use?

eddddy

ianbeale_steeplecocque wrote: »

How can they send a bill "in advance" 4 months after it was due, though? Surely that means they could send me any outstanding bills since the flat was built 10 years ago and if I'm the current owner, that means I'm responsible?

In simple terms...

They can claim ground rent for up to 6 years (I recently got a demand for 6 years of ground rent.)

They have 18 months from the date they pay for something to claim it back as a service charge.

ianbeale_steeplecocque wrote: »

The completion statement that I have includes the apportionments I paid, but not proof that he actually transferred any money. I'm assuming that this isn't really proof enough to use?

Your solicitor would normally get a management pack during the purchase process, and that should include a statement from the management co saying what charges are due etc.

Have you seen the statements? Are they correct, and did your solicitor apportion correctly?

ianbeale_steeplecocque

I've gone through all the files my solicitors sent me, and found a list of payments billed and received for the service charge, and it does show that the period I was billed for was not settled at the time, but the seller has still claimed apportionment.


This is the statement cropped to the relevant line, showing no amount received, and the full balance carried forward:



https://i.imgur.com/41nwk6I.jpg




This was the first flat I bought and this was before I was asked to pay apportionment. Obviously my solicitors (who didn't even apply to close my HTB ISA until the day before I moved) missed that he was claiming for something he hadn't paid.


So is my next move to contact the solicitors again, and tell them that he owes me the £228.16 I paid him, which he claimed apportionment for? I've also edited my first post to include the statement above.