Service charge - who is responsible between exchange and completion

Disjoint

Hi all -
Tried to look it online, but the only thing that keeps on coming up is what type of insurance you should take as a buyer once you've exchanged...
I just exchanged contract on a property and the sale is only due to complete in 35 days - in between that time period I have to do two service charge payments, which I frankly don't want to do if I can avoid it. Question is essentially: if I don't make those payments what happens? The service charge account is managed by all of us leaseholder / share of freeholders.
In any other circumstances I would have paid for it myself, but buyer re-traded me so I am not giving any gifts on this one.

jaybeetoo

You are responsible for the service charge up until completion if you’re selling.

eddddy

It's a complex question.

By not paying, you may (or may not) be...

• Breaching your lease
• Breaching the terms of your contract with the buyer
• Breaching the terms of an agreement to pay your service charge monthly - which I guess you have with your joint freeholders

If you've given accurate information to your solicitor (and your solicitor is diligent), he/she should be making an allowance for any overpayment or underpayment of service charges that you've made. So the service charge will be apportioned fairly between you and the buyer.

So the answer is very likely to be that you have to pay.



Edit to add...

But it's even possible that according to your lease, your 6 monthly service charge payment was due on (say) 31st March...

... but you have an agreement with your joint freeholders that you can pay over 6 months in monthly instalments.

In which case, you'll still have to pay off all those 6 instalments - even after the flat is sold. 

Disjoint

Thanks you both for answers.
Got an answer from solicitor - responsible for May and then pro-rate for June.