Completed on New Flat now solicitor is requesting funds

Gaz2k21

Further to completion in this matter, I have noticed that I had accidentally sent you back the apportionment of the service charges sent to us by the purchaser, which I should have sent to the Council to pay off the arrears. Our statement also omitted the LPE1 fee we paid for the management pack.

 

I would be grateful if you can return the sum of £654.36 so that we can discharge the service charges and obtain the defective lease indemnity for the purchaser.

This is the e-mail

eddddy

So it sounds like something like the following has happened...

• Shortly before completion you received a service charge bill from the council for your flat

• Your buyer paid you £550 towards that service charge bill - the £550 was paid to your solicitor

• Your solicitor mistakenly thought that you had paid the service charge bill - so he sent you the £550 that your buyer paid

• But now your solicitor has realised that you hadn't paid the service charge bill - so he has to pay it. So he needs the £550 back from you so that he can pay the bill.

And it sounds like there was also a Management Pack fee (LPE1) and Indemnity Insurance premium which your solicitor forgot to add to your bill (completion statement).

You say that your original solicitor left and a new solicitor had to take over. I guess there was some confusion in the hand over, which resulted in the new solicitor making the mistakes in your bill.


In terms of whether you really owe the money, it depends whether...

• There really was an unpaid service charge bill

• Indemnity insurance was arranged - and you agreed to pay for it rather than your buyer

• A Management Pack was requested and paid for (it almost certainly was) - and the cost wasn't included in your completion statement

If the answer is "Yes" to those questions, then you probably owe the money to your solicitor.

Gaz2k21

eddddy said:

So it sounds like something like the following has happened...

• Shortly before completion you received a service charge bill from the council for your flat

• Your buyer paid you £550 towards that service charge bill - the £550 was paid to your solicitor

• Your solicitor mistakenly thought that you had paid the service charge bill - so he sent you the £550 that your buyer paid

• But now your solicitor has realised that you hadn't paid the service charge bill - so he has to pay it. So he needs the £550 back from you so that he can pay the bill.

And it sounds like there was also a Management Pack fee (LPE1) and Indemnity Insurance premium which your solicitor forgot to add to your bill (completion statement).

You say that your original solicitor left and a new solicitor had to take over. I guess there was some confusion in the hand over, which resulted in the new solicitor making the mistakes in your bill.


In terms of whether you really owe the money, it depends whether...

• There really was an unpaid service charge bill

• Indemnity insurance was arranged - and you agreed to pay for it rather than your buyer

• A Management Pack was requested and paid for (it almost certainly was) - and the cost wasn't included in your completion statement

If the answer is "Yes" to those questions, then you probably owe the money to your solicitor.

And therein lies the issue I’ve gone through all paperwork, e-mails, everything and there is no mention of any of this. 

eddddy

Gaz2k21 said:

And therein lies the issue I’ve gone through all paperwork, e-mails, everything and there is no mention of any of this. 

An apportionment of Service Charges is standard in almost all leasehold sales - I guess it should have been mentioned somewhere that your solicitor would do that.

Your solicitor wouldn't be able to calculate the amount of the apportionment until exchange of contracts has happened. 

Thinking about this more - were you paying your service charge monthly?
If so it could be that your solicitor mistakenly thought you had already paid the full years service charge. But in reality, you still had £550 of monthly installments left to pay.

I guess you could ask your solicitor to show you the calculation he used to reach the figure of £550.

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A Management Pack (LPE1) is standard in almost all leasehold sales. The fee is paid to your freeholder, and your freeholder would decide what fee to charge.

Again, I guess your solicitor should have mentioned somewhere about the fee. (Some solicitors I've dealt with mention it in their initial quote - but they won't know how much it is until the freeholder tells them.)

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Are you saying that you didn't know about the indemnity insurance, you didn't agree to pay for it, and you didn't know how much it would be?  That certainly sounds very strange.