Seller in arrears on service charges

bouicca21 · 29 April at 11:56PM

SBCN2 said:

bouicca21 said:

My seller was also in arrears. The debt was deducted from the proceeds of the sale.

How long did it take to sort that out? Did it drag on for days, weeks or months?

There was a problem with the sale but it was not related to the arrears. The conveyancing solicitor never indicated that sorting the arrears out was anything other than a matter of routine. As @eddddy suggests it would be useful to find out just why the seller is refusing to pay. In my case it was easy - there was no dispute, the seller was simply cash poor.

SBCN2 · 30 April at 6:48PM

bouicca21 said:

SBCN2 said:

bouicca21 said:

My seller was also in arrears. The debt was deducted from the proceeds of the sale.

How long did it take to sort that out? Did it drag on for days, weeks or months?

There was a problem with the sale but it was not related to the arrears. The conveyancing solicitor never indicated that sorting the arrears out was anything other than a matter of routine. As @eddddy suggests it would be useful to find out just why the seller is refusing to pay. In my case it was easy - there was no dispute, the seller was simply cash poor.

Found out today apparently seller cannot actually pay the arrears and management company will not release pack until he pays upfront.it seems they will not accept an undertaking. Is this not unreasonable? How do they expect to get their money? Does this sound like a dead end for me?

SBCN2 · 30 April at 6:51PM

eddddy said:

I guess it might help to understand why the seller is refusing to pay and/or refusing to sign an undertaking to pay.

For example, is it because...
They don't have the money to pay
They are disputing the service charge
They have some misunderstanding - for example, they don't think they have to pay the advance service charge, because they are selling the flat

I wouldn't be surprised if it was a service charge dispute. You mention that debt collectors are involved. So now legal and debt collection fees could have added hundreds or thousands of pounds to their service charge bill - and maybe the seller is outraged and refusing to pay those fees.

If it is a dispute like that, the seller should be getting advice to pay the service charge (so the sale can go through) - and then challenge the charge at tribunal.

But their conveyancing solicitor and their estate agent might not know enough about service charge disputes and tribunals to advise them on that.

Found out today apparently seller cannot actually pay the arrears and management company will not release pack until he pays upfront.it seems they will not accept an undertaking. Is this not unreasonable? How do they expect to get their money? Does this sound like a dead end for me?

SBCN2 · 6 May at 9:01PM

Marky4040 said:

user1977 said:

Marky4040 said:

SBCN2 said:

Am buying a leashold and everything is ready except for management pack which has not been sent for 9 weeks. Just found out today apparently the seller is in arrears on service charges and management company will not release pack until debt is paid. They have passed the debt to a collector.

the seller is employed and had turned down several offers before accepting mine so doesn’t seem to be in financial difficulties and has always appeared keen to sell. We are now 3 months in. EA told me to give it a couple of days as seller and their solicitor are trying to resolve. My conveyancer said his impression from seller’s solicitor was they are keen to sell and appeared to be trying to resolve and seller needs to either pay what they owe or sing an undertaking with management company to pay with proceeds of sale. I really want this flat but don’t want this to drag out. I asked my conveyancer if after a couple of days we don’t get confirmation they have paid should ai give a month deadline for completion or ai walk. My conveyancer told me he personally would do this. He said losing me as a serious buyer would impact the seller as would take months again to sell, in current market risk the value would go down and any other future buyer would face same issue. Has anyone seen this happen before? Is it likely to get resolved? Should I give the one month deadline? Any advice would be much appreciated.

The lease often has a clause about the management fees & ground rent having to be up to date before a sale. This is what my lease states. usually the landlord or management company have to authorise the transfer of the lease but won't do so if any monies are outstanding.

But as above, not rocket science to arrange for the authorisation to be simultaneous with the arrears being paid from the proceeds of sale. No different to a mortgage lender saying you can't sell because you owe them money.

If you read my response properly before responding you'll see it says, in some cases you cannot transfer the lease until all accounts are fully settled. In my case this had to take place before completion, not during or after. This is the problem i suspect the OP is experiencing.

Thanks. Very helpful.And do you know how your seller managed to pay upfront? Mine is in a financial mess…. And also how long did it take in your case for seller to clear debt?

Hoenir · 6 May at 9:58PM

SBCN2 said:

eddddy said:

I guess it might help to understand why the seller is refusing to pay and/or refusing to sign an undertaking to pay.

For example, is it because...
They don't have the money to pay
They are disputing the service charge
They have some misunderstanding - for example, they don't think they have to pay the advance service charge, because they are selling the flat

I wouldn't be surprised if it was a service charge dispute. You mention that debt collectors are involved. So now legal and debt collection fees could have added hundreds or thousands of pounds to their service charge bill - and maybe the seller is outraged and refusing to pay those fees.

If it is a dispute like that, the seller should be getting advice to pay the service charge (so the sale can go through) - and then challenge the charge at tribunal.

But their conveyancing solicitor and their estate agent might not know enough about service charge disputes and tribunals to advise them on that.

Found out today apparently seller cannot actually pay the arrears and management company will not release pack until he pays upfront.it seems they will not accept an undertaking. Is this not unreasonable? How do they expect to get their money? Does this sound like a dead end for me?

What evidence do you have that the vendor has agreed to providing a legally binding undertaking ? Be surprising if this option was rejected by the management company.

Have you given the one month ultimatium yet. The only option you have is to force the vendor to do something. No point trying to second guess what's actually going on. You aren't getting the full story I'd suggest.

SBCN2 · 7 May at 12:15AM

Hoenir said:

SBCN2 said:

eddddy said:

I guess it might help to understand why the seller is refusing to pay and/or refusing to sign an undertaking to pay.

For example, is it because...
They don't have the money to pay
They are disputing the service charge
They have some misunderstanding - for example, they don't think they have to pay the advance service charge, because they are selling the flat

I wouldn't be surprised if it was a service charge dispute. You mention that debt collectors are involved. So now legal and debt collection fees could have added hundreds or thousands of pounds to their service charge bill - and maybe the seller is outraged and refusing to pay those fees.

If it is a dispute like that, the seller should be getting advice to pay the service charge (so the sale can go through) - and then challenge the charge at tribunal.

But their conveyancing solicitor and their estate agent might not know enough about service charge disputes and tribunals to advise them on that.

Found out today apparently seller cannot actually pay the arrears and management company will not release pack until he pays upfront.it seems they will not accept an undertaking. Is this not unreasonable? How do they expect to get their money? Does this sound like a dead end for me?

What evidence do you have that the vendor has agreed to providing a legally binding undertaking ? Be surprising if this option was rejected by the management company.

Have you given the one month ultimatium yet. The only option you have is to force the vendor to do something. No point trying to second guess what's actually going on. You aren't getting the full story I'd suggest.

Mo evidence yet. We are asking for an update tomorrow from seller’s solicitor whether management company and or debt collector would consider an undertaking of even if only with partial payment upfront or if they have indicated they will not and will only unblock with full payment upfront.
i have not given a one month nut have made clear to the estate agent to pass on I can wait but not forever and only if I see swift evidence of action from seller and his solicitor and transparency with updates going forward otherwise I will rescind my offer. At this point unless seller pays or management company accepts an undertaking the seller accumulates more debt, the management company does not recover their money, the estate agent does not get their commission and the seller’s solicitor is laso unlikely to get any money. I am the solution so everyone gets what they want. If he loses me as buyer he still cannot sell the property with out the management pack, it would still take more months with no guarantees of a sale and the value could also go down in this climate. You would think the debt collector and management company would budge for an undertaking of some sort. But i get they may want some funds from seller upfront to show goodwill more so if they have previously ignored payment reminders etc If the seller really can’t come up with any money what is the likelihood they would not budge when there is a buyer lined up subject to management pack and replies to my enquiries?