Deficit with Service charges

Skeggsy

I brought my flat last July 2020 on a shared ownership scheme with L&Q. My solicitor carried out necessary checks. At the time there were no outstanding charges.

6 months later I've been billed £2,631 for outstanding service charges for the year 19/20 ending in March 2020. 4 months before I moved in.

It came with a new lease of 125 years as I'm the first owner of the property. People before me were renting & moved out October 2019. It was empty for 9 months. 

I pay my service charges to L&Q, not a separate company. 

The £2,631 Bill was generated 6 months after I moved in.
L&Q did not disclose any outstanding debt to my solicitor's. 

I've communicated this to L&Q to no avail. They now want me to pay threatening to increase my rent or take my possessions in my home.

eddddy

Just to be clear...

What is the start date of the lease? Is it July 2020? (That's not the same as asking when you bought the lease.)

If the start date is earlier than July 2020 - who was the owner of the lease before you bought it?


It may be that you have to pay £2,631 and then claim it back from whoever you bought the lease from.


But there's also the '18 month rule' - the law says you don't usually have to pay any service charges incurred more than 18 months ago. So that might 'wipe-out' half the bill.

NameUnavailable

Speak to your solicitors - get them to write a letter to the freeholders if necessary. You shouldn't be liable for any charges prior to the date when you bought (not brought) the flat.

eddddy

NameUnavailable said:

Speak to your solicitors - get them to write a letter to the freeholders if necessary. You shouldn't be liable for any charges prior to the date when you bought (not brought) the flat.

Unfortunately, it's not that simple.


Service charges are payable by whoever the leaseholder is on the date they are billed.


So if a service charge has only just been billed, it's quite likely that the OP is liable to pay it. A letter from the OP's solicitor won't change that.


So typically, a new leaseholder would pay the service charge, and then claim it back from a previous leaseholder.


But the OP seems to suggest that they bought a new lease direct from the freeholder. If that's correct, there seems to be some huge confusion somewhere. The OP needs to clarify that point.

Lunchbox

eddddy said:

NameUnavailable said:

Speak to your solicitors - get them to write a letter to the freeholders if necessary. You shouldn't be liable for any charges prior to the date when you bought (not brought) the flat.

Unfortunately, it's not that simple.


Service charges are payable by whoever the leaseholder is on the date they are billed.


So if a service charge has only just been billed, it's quite likely that the OP is liable to pay it. A letter from the OP's solicitor won't change that.


So typically, a new leaseholder would pay the service charge, and then claim it back from a previous leaseholder.


But the OP seems to suggest that they bought a new lease direct from the freeholder. If that's correct, there seems to be some huge confusion somewhere. The OP needs to clarify that point.

Absolutely, and any decent solicitor would recommend a retention where actual accounts from prior to purchase date are pending. In normal circumstances, the OP is liable for the costs but can try and make a civil claim against the sellers (assuming they didn’t willingly pay up).

in this case though it sounds like the previous owners were L&Q, and this sounds like a significant conflict of interest in terms of trying to recover costs they were liable for and didn’t declare.

m0bov

Should be a retainer, you need to seek the cost from your sol as they are negligent,

NameUnavailable

Yes I meant speak to the solicitor as there should (should!) be a retention somewhere for service charges, which is standard practice.