Apportioned Service charge on purchase, do I have to pay it?

jaybeetoo

If the OP pulls out it will cost them a lot more than £250 of management fees.

Kyresa

I think it is more likely that the Agent has been a bit too flexible with their words or you may have misunderstood the agent. Just because the management charges have been paid to the end of the year it doesn't mean that you don't have to pay your share once you take ownership.

It is common practice that any prepaid service charges are apportioned to the new owner from the date they occupy the property.

I'd go back to the Agent and see if you have misunderstood!

Laurz90

I appreciate everyones responses and agree that standard practice was to apportion the charges and fees from when I take ownership, I would like to clarify that I did assume on the following basis.

It was agreed that the service charges would be covered to the end of the year as per the selling price and the estate agent has admitted to that, the downside is this was never documented despite this late admittance. Anyhow, I have paused exchange of contracts and requested that the funds are transferred back to me to prevent loss of interest until this can be ironed out.

Thank you again to everyones contributions, it was very helpful. It does appear that this was negotiated as per the property price and we are now trying to reach an agreement due to this issue.

Lokolo

You're going to risk the collapse of purchasing a property based on £250? Am I right in saying you are a first time buyer?

If the vendor agreed to paying the rest of the year then you have a case, but I highly doubt they did. And frankly your position is ridiculous. Why should the vendor pay for a service charge where they don't get the service?

Good luck.

AlexMac

And just to give you something more than the £250 to worry about...

When I last bought a leasehold flat, I happily let the solicitors apportion the Service charge in the usual way...

... but felt a bit aggrieved when, 3-4 months after a February completion, and following the financial year end, the local authority freeholder stuck us with a supplementary Service Charge based on actual expenditure. The apportionment had been based on the annual forward estimate, as I now know is quite common with this particular local authority.

... but then aggro turned to pleasure when I learned that my (particularly competent) solicitor had asked the other side for to hold back a "retention" against just this likelihood. So I got the couple of hundred quid back.

Swings and roundabouts, eh?

SallyDucati

AlexMac wrote: »

And just to give you something more than the £250 to worry about...

When I last bought a leasehold flat, I happily let the solicitors apportion the Service charge in the usual way...

... but felt a bit aggrieved when, 3-4 months after a February completion, and following the financial year end, the local authority freeholder stuck us with a supplementary Service Charge based on actual expenditure. The apportionment had been based on the annual forward estimate, as I now know is quite common with this particular local authority.

... but then aggro turned to pleasure when I learned that my (particularly competent) solicitor had asked the other side for to hold back a "retention" against just this likelihood. So I got the couple of hundred quid back.

Swings and roundabouts, eh?

Retentions are normal - I had one against my seller when I bought my flat in 2000. When I sold last year a retention was held by my solicitor - I just got it back!

Laurz90

Please find an update.

No I have not risked the collapse of the property purchase on solely £250. It is a precedence that this was what was agreed, and therefore not followed and shouldve been documented and took into account. Just to clarify I did not suggest the seller pay for services they will not receive post completion, this was suggested by the seller and estate agent when we negotiation the purchase price as they had already paid them and were comfortable with no apportionment.
I hope that discards your assumptions. Regardless, I will never complete a contract if there are several concerns or queries outstanding, regardless of whether it is pennies, single pounds of thousands. You would be wrong in presuming I am a first time buyer, but I can confirm this is my first leasehold, and possibly last.

For those interested in whats happened...
The property I am purchasing is vacant.
The purchase price was agreed with the seller, for them to cover service fees up to the end of the year as per the agreed property price and as per their suggestion.
This has now been documented in full and contracts exchanged this morning with completion due on Friday.

I again appreciate everyones support and timely responses.