Service Charge

BrokenOwl

Hi , 

We purchased our ex-council house in 2022. The previous owners bought the house through right to buy and we have purchased it as a freehold. 

We were not aware of any service charge when purchasing the house and are wondering if this bill needs to be paid by us. We have not received a bill, the bill has been sent to the previous owner and they have posted a letter to us asking us to contact the HA to make payment. 

Im not really sure what to do? 

Thanks 

ExEstateAgent

What exactly is the bill for? 

I'd ignore it personally until/unless you are billed directly. Where there are service charges the solicitors usually arrange a retention but I'm assuming nothing was mentioned? 

Chief_of_Staffy

If it's freehold then that's an estate charge, not a service charge. Otherwise known as fleecehold. You need to clarify it with the HA, I would suggest. Your solicitor should have flagged this when you bought the house. If they didn't, it's negligence and you could sue them.

ExEstateAgent

Chief_of_Staffy said:

If it's freehold then that's an estate charge, not a service charge. Otherwise known as fleecehold. You need to clarify it with the HA, I would suggest. Your solicitor should have flagged this when you bought the house. If they didn't, it's negligence and you could sue them.

Estate charges are usually for new estates where the roads are not adopted. As the OP has bought an ex council property I would expect that the roads are adopted? (although council and HA are not the same so maybe there's some confusion as to what the OP has bought). 

Chief_of_Staffy

They still need to clarify it. If this is an estate charge, the worst thing you can do is ignore it. They can lose their house by doing that. Again, if it is an estate charge it's good luck they old owner got in touch, because there's no requirement for a bill to even be issued.

It is strange that no action has been taken for three years, however. I suspect some of the information we're being told is incorrect.

BrokenOwl

The house was built in 1950 so isn’t a new build. 

The letter from the previous owner included a letter from Housing Association addressed to her stating she has outstanding service charge, NOT estate charge.
 

In the letter it says the service charge is for the “Neighbourhood Environmental Team” which she highlighted is for the two small patches of grass in the cul-de-sac to be mowed and that I should have informed the HA that I had purchased the house. 

I have looked through the deeds and our solicitors information and cannot find anything referring to us needing to pay service change? 

I hope that clarifies the situation further. 

 

Chief_of_Staffy

They may refer to it as a service charge but I very much doubt it is one. I don't believe you can have a service charge on a freehold property, it would be an estate charge or rentcharge. These are governed by different, significantly more restrictive legislation.

As I say, you need to first contact the HA and confirm it's genuine. And if it is, you have to pay it. There's no way around an estate charge. Then sue your solicitor.

twopenny

If the previous owner sent you a letter and included another letter informing her that she has an outstanding service charge - then for what dates does the outstanding charge cover?

Does she owe for something previously done for her?
Or is it ongoing that all properties pay?

daveyjp

With changes in ownership and managment from Council to HA it is not unusual for mistakes to be made identifying which properties have to pay towards common area works or paperwork not be be watertight.

 The world of Councils and HA property sales and management can be very different to the modern systems of estate charges so the only reference are the documents at the time of the sale.

When stock transfer occured in one of our council areas about 30 years ago only the houses were transferred, any other land such as verges, play areas etc remained under control of the council.

The starting point is therefore for the property owner to ask the HA for evidence they are liable for the charge.