Backdated and unexpected service charges - after sold flat

Mochain

I sold my flat in March 2022. I have now had a backdated bill for over £900 from the managment company for accounts up to October 2021. They say they underestimated the costs. Am I liable for this and potentially another bill up to March 2022 for any further underestimation. It is a company call HML/B-hive who are appalling as a managment company. 

Advice appreciated. 

Thanks
Paul

Brie

Well it seems fair that if the costs are real and are from when you lived there that you should pay them.  Otherwise it's down to the new owner or the others in your leasehold group.  

Have they justified the costs and why it's taken so long to advise you about it?  

AlexMac

I agree with Brie; you might just have to swallow this.  At least you're now shot of HML/B-hive?    I too hate Agents and much prefer the "Shared Freeholds" I've owned where we ran the Freehold Company ourselves; kept accounts, did statutory returns, comissioned our own repairs including external decs and saved a mint!

I was on the other end of a transaction like this; I bought an ex-Local Authority leasehold flat in a February, so very near the end of the Freeholder's April - March Financial Year.  In April or so, I got hit by a bill of a few hundred quid, as the previous owner had naturally only paid the estimated Service Charge demands and the Freeholder always did an end-of-year actual.  

I asked my solicitor with no great hope; and was delighted to find she'd kept a "Retention" against this common eventuality!  Result; their loss, my gain.

So I guess you could tel the B-hive to buzz off, but don't hold your breath?

TripleH

To be consistent in my advice, I think you should have to pay these fees. You have had the opportunity to benefit from the services being paid for whilst it's a bit unfair on the new owners paying for things for a period they didn't own the property.

I do sympathise however with you for such an inefficient management company, I have had dealings (in work) where it has taken 2 years to get a final bill and our firm were theinly tenant.

Sandtree

We've had the opposite happen... owned a flat for a moderate time and then got a massive rebate on the water (almost £1,000 per flat) which all came to us rather than any attempt to redistribute to those that had actually made the overpayments (presumably over the 15 years the property has existed before we bought it)

kingstreet

I believe that morally, it's your liability.

Legally, I suspect the liability now lies with the current leaseholder and if there was any doubt over the figures the purchaser's solicitor should have requested a retention to cover any possible shortfall.

eddddy

Based on what you say - somebody has made a mistake.

The management company shouldn't have sent the bill to you - and you don't owe the money to the management company. (But you might owe it to your buyer.)

The way the process should work is as follows:

• The buyer's solicitor should have given the management company / freeholder a "Notice of Transfer" in March 2022 - notifying them of the new leaseholder.

• From then onwards, all new service charge bills should have been addressed to the new leaseholder - even if they related to services carried out before March 2022

• So the new leaseholder owes the money to the management company - not you.

• BUT when you sold the flat,  it's likely that you contractually agreed to reimburse the buyer for any service charge adjustments. (The solicitors may have arranged a retention to use for this purpose.)

• So... the new leaseholder should pay the bill, but you probably have to reimburse the new leaseholder

So as I say, the management company shouldn't have sent the bill to you. If they sent it to you (with your name), I suspect one of the following mistakes has occurred:

1. The buyer (or their solicitor) failed to send a valid notice of transfer (and fee) to the freeholder/management company
2. The buyer (or their solicitor) sent a valid notice of transfer to the freeholder/management company, but they have lost it
3. The freeholder/management company are incompetent and have sent the bill to the wrong person

Most often, it turns out to be option 2 or 3.

So tell the management company that you are no longer the leaseholder, and suggest that they check their records for a notice of transfer.

madaboutspots

My experience was that any management company is rubbish but regardless …..

yes sadly you should be liable but …. The new owner of the flat should have had their solicitor draw up conditions of sale that included this as a caveat.

I sold my flat some years ago and had to hand over a very generous amount on deposit for exactly this occurrence and I only got my change back once the full accounts were provided by the management company. I recall this took over 18 months and drove me to distraction. 

I would suggest you contact your solicitor who dealt with the sale on your behalf and ask if any agreement was discussed/made for you to pay what came up during your ownership. If nothing was requested or put in the exchange of contracts - your solicitor should be able to explain where you stand. I wouldn’t think it reasonable for them to charge you for this follow up query as it should be covered by their initial fee. 

If it were me - I’d strongly argue that buyer beware and the new owner would have to look to claim from their solicitor for failure to cover all the details or just pay the outstanding monies and learn from their mistake. 

I’m not legally trained though so may well be wrong. 

MSE_ForumTeam5

Threads moved and merged

eddddy

madaboutspots said:

I would suggest you contact your solicitor who dealt with the sale on your behalf and ask if any agreement was discussed/made for you to pay what came up during your ownership.

It might be better to do the following:

• Contact the management company to suggest that they check their records for a "Notice of Transfer" from the buyer

and/or

• Contact the buyer to say that you are still receiving service charge bills - so the buyer should chase their solicitor and/or the management company about the "Notice of Transfer". And maybe tell the buyer that they might end up having to pay Service Charge "Late Fees" and ultimately they might have their lease forfeited (i.e. have their flat repossessed), if this doesn't get sorted.