Management pack confusion

chris316

Hi, my fiancé is selling her house that she's had for just over a year, the buyers solicitor won't proceed until she has paid nearly £500 for a management pack. Apparently the issue is proving the ground rent is up to date (which it was when she purchased it) Google gives varying answers if this is a legal requirement. I've sold a house in this period and an email with a statement showing everything was up to date was sufficient. I've bought a few BTLs in this period too with no mention of this.

Any ideas if she really needs to pay this?

Cheers

propertyrental

It is standard practice with leasehold properties to get a management pack from the freeholder or management company. It provides a lot more info than just ground rent payments.

It's also common practice for management companies to charge an admin fee, though £500 is way more than is usual. Whether the amount can be challanged I'm not sure, but if I ws the buyer it would ring alarm bells. Would I want to buy a flat that was managed by such a company.....?

Tiglet2

It may not be a legal requirement for the seller to pay and provide the pack, but I'm yet to come across any buying solicitor who will proceed without one. 

You are asking the buyer to 'believe' the information your fiance provides but without any collaboration/confirmation from the management company/freeholder.  It doesn't matter that the ground rent was up to date on her purchase, it is confirmation that there are no arrears on completion that is the important factor here.   Information provided by a seller cannot be relied upon, only information provided by the management company can.  The buyer's solicitor needs to protect themselves, the lender and their client legally by doing the due diligence.

If your fiance doesn't want to pay the £500, then it is almost certain the buyer will have to pull out.  

propertyrental

Leaseadvice is a government advice service for leaseholders. They say:

https://www.lease-advice.org/faq/im-selling-my-property-can-my-landlord-charge-a-fee-for-answering-pre-sale-enquiries/

Usually, the buyer’s solicitor will send questions for the landlord to answer. Although the landlord is under no legal obligation to answer such questions most will be willing to do so. They may charge an administration fee for answering the questions.

The Service Charge Residential Management Code (3rd Edition) for England, at Section 13.10, states that such an administration fee should be reasonable and reflect the level of work carried out as a matter of best practice.

What can I do if I disagree with an administration charge?

Jonboy_1984

We had to make an undertaking when we sold our flat last year. 

This means we had to pay upfront for the management pack (£180+VAT from memory) and put some further money on account with the freeholder solicitors for their costs later in the process, this all totalled around £600. 

This was then reclaimed from the buyer when the sale completed.

propertyrental

Jonboy_1984 said:

We had to make an undertaking when we sold our flat last year. 

This means we had to pay upfront for the management pack (£180+VAT from memory) and put some further money on account with the freeholder solicitors for their costs later in the process, this all totalled around £600. 

This was then reclaimed from the buyer when the sale completed.

Isn't it usually the buyer who makes the enquires direct to the freeholder, or requests a management pack? And pays for it at that time?

user1977

propertyrental said:

Jonboy_1984 said:

We had to make an undertaking when we sold our flat last year. 

This means we had to pay upfront for the management pack (£180+VAT from memory) and put some further money on account with the freeholder solicitors for their costs later in the process, this all totalled around £600. 

This was then reclaimed from the buyer when the sale completed.

Isn't it usually the buyer who makes the enquires direct to the freeholder, or requests a management pack? And pays for it at that time?

No, everything goes via the seller.

eddddy

You mention Ground Rent - so I guess it's a leasehold house.

Most documents aren't is really a 'legal requirement' when selling or buying a property.

However, buyers of leasehold properties will almost always want a management pack and their mortgage lenders usually want it as well.

So if your fiancé wants to sell her house, she'll probably have to get one.

A management pack will probably comprise of an LPE1 form. You can see a sample here, to see what questions the Freeholder (or their agent) will answer: https://www.lease-advice.org/files/2022/01/LPE1-form.pdf


But £500 sounds a bit excessive. Your fiancé could pay it, and try challenging it at a tribunal later.



(But tribunals seem to have been a bit "hit and miss" about ruling on management pack fees. Sometimes they seem to decide that the fee is an Administration Charge in relation to the lease. Other times they seem to decide it isn't.)