Selling a Leasehold property suddenly being asked for £9321.45 Service Charge

greatcrested

Have you actually got a breakdown of what these charges are for?

Ground rent: which years being claimed for and how much each year?

Service charge: accounts for each year showing not just the total but what it was spend on for each year?

james277

greatcrested said:

Have you actually got a breakdown of what these charges are for?

Ground rent: which years being claimed for and how much each year?

Service charge: accounts for each year showing not just the total but what it was spend on for each year?

Yep 2 days ago i was given a breakdown it's £1600 insurance each year and £250 ground rent each year that's due

james277

coachman12 said:

I think you should just phone around , James, and find a solicitor who knows about The Landlord & Tenant Acts, particularly the 1985 and 2019 Acts. You can say it could lead to him getting a worthwhile fee out of it all-----even if not true, as a way of making him/her more eager to meet you and provide initial advice. This area of legislation is not too complicated and you should find a solicitor without too much trouble. If you had the time and patience you could read through the legislative provisions yourself----the Acts are printed, in updated, form online ( with an index to save you time finding the right sections): but you are probably not willing to do that. At another time, I'd offer to do it for you myself----really.

Thanks so much! You've been so helpful already, I just wanted to ask if you knew whether this is something I can pay now for the sale ot go through and the dispute?

davidmcn

james277 said:

greatcrested said:

Have you actually got a breakdown of what these charges are for?

Ground rent: which years being claimed for and how much each year?

Service charge: accounts for each year showing not just the total but what it was spend on for each year?

Yep 2 days ago i was given a breakdown it's £1600 insurance each year and £250 ground rent each year that's due

*blink*

How much for the insurance? That's absurd (assuming you're not living upstairs from a fireworks factory or something).

blue_max_3

davidmcn said:

james277 said:

greatcrested said:

Have you actually got a breakdown of what these charges are for?

Ground rent: which years being claimed for and how much each year?

Service charge: accounts for each year showing not just the total but what it was spend on for each year?

Yep 2 days ago i was given a breakdown it's £1600 insurance each year and £250 ground rent each year that's due

*blink*

How much for the insurance? That's absurd (assuming you're not living upstairs from a fireworks factory or something).

Agreed. That is a huge amount. You need to see why it was so expensive. I used to insure a whole property of three two-bed flats which had been underpinned for under £1k total (approx £350 per flat).

eddddy

james277 said:
Thanks so much! You've been so helpful already, I just wanted to ask if you knew whether this is something I can pay now for the sale ot go through and the dispute?

That's a very complex question. But briefly:

• Has the service charge been demanded in the correct format? If not, it is not payable. But then your buyer will become liable for any outstanding service charges. (And they probably won't buy your flat, if there are outstanding service charges.)

Perhaps the best approach to get the sale completed is...

• Tell the freeholder that you will pay the service charge under protest, and then challenge it at a tribunal. (That 'threat' alone might make the freeholder reconsider the amount.)

• Once paid, the sale can probably proceed.

• From what you say, if you then went to tribunal, the tribunal is very likely to order the freeholder to pay you back a big chunk of the £9.3k

But if your buyer starts to realise how incompetent the freeholder is, and the type of hassle they are causing, it might scare them away from the purchase.

Neil49

You really need to get proper legal advice on this asap and get everything on a legal footing. Yes, it will cost you some money but I don't see that you have much of an option. 

We are currently selling our properly organised leasehold flat and it involves the provision of a significant quantity of documentation for the sale to proceed. 

In your case the buyers solicitor will want to see documentation regarding the annual service charge costs (amongst many other things). If your paperwork arrived at the buyers solicitors showing a.? rather than a detailed breakdown of costs they would advise the buyers not to proceed until it was sorted. In fact, they would probably tell them to walk away and look elsewhere. 

blue_max_3

Incidentally, if the buyer asks about service charges, they might run a mile too! You really need to get this clarified. Maybe there was a 'sinking fund' element or something to justify?

james277

eddddy said:

james277 said:
Thanks so much! You've been so helpful already, I just wanted to ask if you knew whether this is something I can pay now for the sale ot go through and the dispute?

That's a very complex question. But briefly:

• Has the service charge been demanded in the correct format? If not, it is not payable. But then your buyer will become liable for any outstanding service charges. (And they probably won't buy your flat, if there are outstanding service charges.)

Perhaps the best approach to get the sale completed is...

• Tell the freeholder that you will pay the service charge under protest, and then challenge it at a tribunal. (That 'threat' alone might make the freeholder reconsider the amount.)

• Once paid, the sale can probably proceed.

• From what you say, if you then went to tribunal, the tribunal is very likely to order the freeholder to pay you back a big chunk of the £9.3k

But if your buyer starts to realise how incompetent the freeholder is, and the type of hassle they are causing, it might scare them away from the purchase.

Thank you, I have a call with LEASE booked for Friday, if I can pay the service under protest that to me seems like the best way to do it, as you say i hope I can then challenge it, unfortunately, I'm not talking directly to the freeholder they are instead going through a lawyer, as they say, they are too busy. I thought the lawyer would be aware of this rule but apparently not

Nope I've never had the service charge demanded except from hearing from my solicitor that there are outstanding arrears that need to be paid before I can sell, I also have an email from the freeholders lawyer that they admit that the requests are late.

Once again thank you so much for the help with this messy situation

james277

blue_max_3 said:

Incidentally, if the buyer asks about service charges, they might run a mile too! You really need to get this clarified. Maybe there was a 'sinking fund' element or something to justify?

I have seen the LE1 form that they are getting and it has the correct service charge number in the box that I had a question mark in, so they have been made aware of it and are happy to pay this, as it seems like the figure is around the average. The service charge is just for the building insurance. Which the freeholder's lawyer is stating is £3200 a year for a building with a maisonette on the bottom and a 1 bed flat on top in Brixton.