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Charges for a leasehold 2 years before I owned it

Hi
I brought my first property in September 2023
Today I received an invoice from the management group for a shortfall in their funds from 2021. The amount is only £35, but I didn't own the property in 2021. I contacted my solicitor and was told that they didn't take a retainment amount due to the information provided within the information pack.  The statement of accounts stated there was nothing to pay but I've been told that 4.3 said 'its unusual for a shortfall to occur because of the failure to anticipate the actual expenditure', which I would understand if it was this years accounts but these accounts are from 2 years ago. 
Surely they have to keep the accounts up to date and 2 years is not suitable length of time to be contacting people for over spending?

Comments

  • eddddy
    eddddy Posts: 16,144
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    edited 18 November 2023 at 5:42AM

    This is a surprisingly complex issue. Here's a simplified explanation of some key points:

    • In simple terms, it is the date that the service charge bill is issued that is important - not the period it relates to. If the service charge bill was issued after September 2023 (after you became the leaseholder), you are liable to pay it to the management company.
    • But... when you bought the flat you had a contract with the seller, which would typically say that the seller would repay you for any late service charge bills you receive. But your solicitor is suggesting that your contract didn't say that.

    However...

    • There is something called "The 18 month rule". Section 20B of the Landlord and Tenant Act 1985, says that a landlord has 18 months within which to notify you of service charge costs being incurred or demand payment from you.

    So you can argue with the management company that they have left it too late to claim the 2021 costs from you.

    But if the management company disagree with you, you would have to go to a Tribunal to get a ruling.



    So the bottom line is... You can argue with the management company about the 18 month rule if you want, but even then, it is important that you pay the Service Charge bill on time.

    If you don't pay the Service Charge bill on time, the management company can start to add costs to the bill, which might add up to hundreds of pounds.



    The 18 month rule: https://www.lease-advice.org/case-study/service-charges-18-month-rule/



  • Excellent advice but:

    eddddy said:


    .............

    So the bottom line is... You can argue with the management company about the 18 month rule if you want, but even then, it is important that you pay the Service Charge bill on time.

    If you don't pay the Service Charge bill on time, the management company can start to add costs to the bill, which might add up to hundreds of pounds.
    There is indeed a risk of additional charges (admin fees, solicitor's fees, debt collectors fees....) So yes, pay the £35 but put in writing that you do so under protest if you intend to go on to challenge this.
  • I would go back to your solicitor and ask them what they advise - they should have covered this and held a retainer (although for the sake of £35 I would also pay it to avoid any more hassle).
  • user1977
    user1977 Posts: 13,376
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    I would go back to your solicitor and ask them what they advise
    They already have.
  • Jonboy_1984
    Jonboy_1984 Posts: 1,195
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    I would go back to your solicitor and ask them what they advise - they should have covered this and held a retainer (although for the sake of £35 I would also pay it to avoid any more hassle).

    A retainer is normally only held for a few months until the accounts are finalised, and then released unless for a specific purpose. Given the length of time involved in this specific case, it would likely have been more awkward rather than less if there was one.
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