Previous flat owner claiming overpaid service charge

guideme

I bought my first flat in September where the service charge is payable twice a year (December and June). My solicitor calculated a service charge apportionment on completion and then I paid the amount asked of me from the managing company in the December bill.

Today I received a message from the previous owner asking me to call them as they are in dispute with the managing company as they have lost out significantly "to my enrichment".

I went through my emails and saw my first service charge demand showed a credit of £700. I just thought I paid less than I was expecting because I had paid a chunk for the service charge to my solicitor for completion and that the account had built up a reserve.

I'm a bit clueless with the whole process and hesitant to reply to them. I just pay the bills sent to me. I thought everything was calculated and in order.

I don't know what to do, I've already been charged extra unexpected fees to register the property (several months after completion the land registry needed some kind of compliance document from it previously being shared ownership and the managing company are charging several hundred for it)
 
Has anyone dealt with this before? What's the legal situation? I've contacted my solicitor but it'll be a while before I get a reply from experience.

Thank you

fullyrendered

Tell them it needs to be dealt with by the conveyancing solicitors. At the point of completion the contract would have either included a full and final settlement in respect of service charges, or detailed what would happen in respect of reconciliation or additional charges.

You need to learn about service charges, don't just blindly pay the bills. For a start there will be an annual estimate, does the service charge year run from January to December? It sounds like the lease sets out that payments must be paid half yearly. 

At the end of the service charge year there will be a reconciliation, i.e. what were the actual costs for the year, this will result in an adjustment to your account, you could have to pay more, or get a credit to the account (or refund depending on the lease terms).

If the previous leaseholder was in dispute about something specific you would expect that to be allowed for by your solicitors. If it's simply a credit because the money spent last year was less than estimated, that's tough on them. If the costs had increased you would be liable, or would the previous owner be happy to pay you for any increase?

The other costs you mentioned are not related to the service charge.

gwynlas

It might be that the service charge includes a contribution to a sinking fund built up in anticipation for major works and the previous owner expected to be reimbursed their contribution to this.  This thinking would be incorrect unless there was provision made for this in the lease/management set up.

However if this is why they are in dispute with the management company it is not your problem and your purchase included proportioment of the service charge and any benefit of  a sinking fund accrued.

This is entirely fair and legal though they consider it to be to your enrichment it is part and parcel of leasehold ownership.

You do need to educate yourself about what your service charge covers and what would be the situation regarding your building needng major repairs outside of this.

TripleH

Always read the bills and ask for copies of the accounts.

The accounts should say what you are paying for maintenance, admin fees, communal electricity etc.

When we sold, we had to provide funds on account to cover future work.

We claimed these back because the buyer never requested their release after 2 years and our argument was that the work hadn't started by the time we sold and was for replacing the balcony on all flats, a benefit we would never have, but if we had over paid fees, thatvwas our tough luck (and life).