Service charge arrears have arisen for the year before we moved in. Who should pay?

492800

Hi all hope you can help. We bought our flat 18 months ago in July 2022.

There were no know arrears on the service charge for our block of flats. Unfortunately the Management company/freeholders have made HUGE errors in accounting and have gone and looked at previous years and have found that money is owed for the year before we moved in (for the year April 2021 to March 2022).

Are we able to go back to the person we bought this flat from and legally they have to pay this bill, or is this a case where all bills and debts are forwarded to us as as we as the legal owners now?
Thanks in advance 

propertyrental

You can certainly claim from the previous owners. Whether they will cooperate is another matter....

The Manco are likely to pursue you for this. Given it was their errorn you'd have goodn grounds to claim you are not liable. How a Tribunal would rule I'm not sure.

eddddy

There are a few considerations here...

• The date the service charge bill is issued is important. It sounds like it was issued after you become the leaseholder in July 2022 - so you are liable to pay it. (Even though it relates to 2021/22)

• But when you bought the flat, you contract with the seller probably said that the seller would reimburse you if this happened. So you can try claiming from the seller. (Often your solicitor would arrange a retention to deal with this.)

• However... there is also an '18 month rule', which says the Man Co / Freeholder must notify you of a service charge being incurred or send you a bill within 18 months. If they've taken longer than 18 months, you don't have to pay it.     See: https://www.lease-advice.org/case-study/service-charges-18-month-rule/

If appropriate, you can try arguing with the Man Co / Freeholder over the 18 month rule. But if they won't back down, as with all disputed service charges, it's generally best to pay it under protest, and challenge it at a tribunal later.


(Similarly, if anything on the service charge bill is unreasonable for any other reason, you can pay it under protest, and challenge it at tribunal as well.)

our_des

Have you asked the solicitor you used to buy the property if a retainer was taken from the seller for this kind of thing? 

penners324

Your Conveyancer should have a retainer on account. Claim it.

492800

penners324 said:

Your Conveyancer should have a retainer on account. Claim it.

Unfortunately the retainer was only to be held for a year so it has been already been returned

user1977

492800 said:

penners324 said:

Your Conveyancer should have a retainer on account. Claim it.

Unfortunately the retainer was only to be held for a year so it has been already been returned

Does your contract make the vendor liable for sums which later surface?

amandaleeds

When I sold my flat, I had to pay the ManCo over £300 to fill in a special form which included confirmation that I was up to date with service charge payments. You or your solicitor should have a copy if this (LPE1?)