First time buyer and landlord - Flat bought on auction with hidden service and ground rent arrears

htcclub

eddddy said:

ashthemash said:

I have written to the seller's solicitors asking them to provide the service charge account and ensure all charges for the period before the completion date are paid. I have referred them to the general condition G22  of the contract.

https://www.auctionhouse.co.uk/Documents/AuctionConditions.pdf

I think you've misunderstood G22.

G22 relates to things like buying the freehold of a block of flats.

As a simple example, G22 might apply if you bought the freehold of a block of 5 leasehold flats. The seller has to tell you which leaseholders/tenants have paid their service charge etc.


(Your flat has a tenant, so perhaps you could argue that you want details of service charges paid by your tenant. But your tenant doesn't pay service charges. So the details would be "zero".)

Looking at the auction conditions. I can't see much reference to 'leaseholder'. Seems odd to discuss tenant service charges and not include leaseholder service charges. So I am thinking it's possible the reference to 'tenant' could relate to 'leaseholder'. As a leaseholder is a tenant to a Freeholder right? (not an expert here ask solicitor!)

Also, again not an expert at all, but a quick google: Lease forfeiture seems able generally where there is a forfeiture clause in and the lease and/or (not sure if and or or)  :...amount of unpaid ground rent, service charges or administration charges is more than £350 in total, or has been outstanding for more than three years...' + other conditions. Might be worth seeing what the lease says about forfeiture and querying this generally with solicitor.

Anyway, best of luck Ash

user1977

htcclub said:

eddddy said:

ashthemash said:

I have written to the seller's solicitors asking them to provide the service charge account and ensure all charges for the period before the completion date are paid. I have referred them to the general condition G22  of the contract.

https://www.auctionhouse.co.uk/Documents/AuctionConditions.pdf

I think you've misunderstood G22.

G22 relates to things like buying the freehold of a block of flats.

As a simple example, G22 might apply if you bought the freehold of a block of 5 leasehold flats. The seller has to tell you which leaseholders/tenants have paid their service charge etc.

(Your flat has a tenant, so perhaps you could argue that you want details of service charges paid by your tenant. But your tenant doesn't pay service charges. So the details would be "zero".)

Looking at the auction conditions. I can't see much reference to 'leaseholder'. Seems odd to discuss tenant service charges and not include leaseholder service charges. So I am thinking it's possible the reference to 'tenant' could relate to 'leaseholder'. As a leaseholder is a tenant to a Freeholder right?

Yes, a leaseholder is a tenant. But the point is that the OP has not bought a property subject to tenancies which have a service charge liability. So the clause referenced above is irrelevant.

justwhat

Hippycamper said:

Did you agree to take on the previous owners debt - because you are saying they cannot talk to you cos they don’t recognise you as the owner.

it’s a difficult one, have we all got the correct information?

Everyone I know who has sold a propert in England (is this taking place in Scotland) leaves the property debt free - then they get any profit.

Don't really have  leaseholds on residential properties in scotland.

justwhat

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

user1977

justwhat said:

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

The OP didn't instruct a solicitor until it was too late. 

justwhat

user1977 said:

justwhat said:

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

The OP didn't instruct a solicitor until it was too late. 

,mmmm even if you bid and hammer goes down the legal pack should be correct. if the legal pack is incorrect or wrong then the solicitor should deal with it.

user1977

justwhat said:

user1977 said:

justwhat said:

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

The OP didn't instruct a solicitor until it was too late. 

,mmmm even if you bid and hammer goes down the legal pack should be correct. if the legal pack is incorrect or wrong then the solicitor should deal with it.

Not sure what you mean by "incorrect" or "deal with it". When the hammer falls then you're in a binding contract and are deemed to have accepted whatever the legal pack discloses (or hasn't). You're only helped by anything in the contract which overrides that - which is pretty limited. All your solicitor can do by that stage is give you advice.

justwhat

user1977 said:

justwhat said:

user1977 said:

justwhat said:

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

The OP didn't instruct a solicitor until it was too late. 

,mmmm even if you bid and hammer goes down the legal pack should be correct. if the legal pack is incorrect or wrong then the solicitor should deal with it.

Not sure what you mean by "incorrect" or "deal with it". When the hammer falls then you're in a binding contract and are deemed to have accepted whatever the legal pack discloses (or hasn't). You're only helped by anything in the contract which overrides that - which is pretty limited. All your solicitor can do by that stage is give you advice.

The legal pack has to be factual and correct, it must contain facts. it must state what is being sold and you must get what it says. Otherwise any old carp can be put in there. The purchasing solicitor should verify you are getting what it says in the legal pack. The legal pack is or should be what the selling solicitor is selling. 

Link below covers the basic's 

https://www.propertyreporter.co.uk/auctions/egal-pack-misrepresentation-is-losing-investors-money-at-auctions.html

Slithery

justwhat said:

user1977 said:

justwhat said:

user1977 said:

justwhat said:

surely the purchasers solicitor should have verified  there was no debt / leasehold debt and the legal pack was correct.  Even at auction you have contractual rights. I have bought at auction and our legal pack was verified by our solicitor.  

The OP didn't instruct a solicitor until it was too late. 

,mmmm even if you bid and hammer goes down the legal pack should be correct. if the legal pack is incorrect or wrong then the solicitor should deal with it.

Not sure what you mean by "incorrect" or "deal with it". When the hammer falls then you're in a binding contract and are deemed to have accepted whatever the legal pack discloses (or hasn't). You're only helped by anything in the contract which overrides that - which is pretty limited. All your solicitor can do by that stage is give you advice.

The legal pack has to be factual and correct, it must contain facts. it must state what is being sold and you must get what it says. Otherwise any old carp can be put in there. The purchasing solicitor should verify you are getting what it says in the legal pack. The legal pack is or should be what the selling solicitor is selling. 

Link below covers the basic's 

https://www.propertyreporter.co.uk/auctions/egal-pack-misrepresentation-is-losing-investors-money-at-auctions.html

The link you posted has nothing to do with the OP's situation as they aren't arguing the tenants rights to continue living in the property.

You are correct that the purchasing solicitor should verify what is being sold - but the OP decided to buy without consulting a solicitor...

eddddy

justwhat said:

The legal pack has to be factual and correct, it must contain facts. it must state what is being sold and you must get what it says. Otherwise any old carp can be put in there. The purchasing solicitor should verify you are getting what it says in the legal pack. The legal pack is or should be what the selling solicitor is selling. 

Link below covers the basic's 

https://www.propertyreporter.co.uk/auctions/egal-pack-misrepresentation-is-losing-investors-money-at-auctions.html

I think you've missed the point. This isn't a dispute about the content of the legal pack.

The issue is that the previous owner has service charge arrears. 

If the previous owner had said in the legal pack "there are no service charge arrears" - then your point might be relevant. But the OP hasn't suggested that's the case.