Service Charge from previous owner

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    Service Charge from previous owner

    End of last year we bought a leasehold property at auction. Now the freeholder (who also sold us the flat) sold the freehold. The new landlord just sent us an invoice including the service charge, building insurance and ground rent from 2016 to today.
    On the legal pack our solicitor mentions that there isn't clear whether there are any outstanding service charges and that they have contacted the seller's solicitor who has not answered.
    This year we had major issues with water leaks from the communal landing into our flat but we couldn't get hold of the landlord (we were not aware if there is a building management company) so we had to foot the bill ourselves.

    The new landlord offered to help us recover from the other leaseholders the amount we paid ourselves but he is insisting we must pay his invoice first. Any thoughts how can we go around this please?

    There are two separate issues.

    It is unclear why you could not get hold of the freeholder or why you paid the bill for the water leak but you should be entitled to recover the amount, less your share of the cost, from the current freeholder. The cost may be recoverable under the buildings insurance policy depending on the cause.

    If the new freeholder has only just acquired the freehold interest, he is entitled to charge from the date of his purchase. If he is stating that there were arrears at the date when he purchased, he is required to provide proof to you. If the previous freeholder did not charge you and you did not have an interest in the leasehold property until late 2017, he will have some difficulty.


      The latest on this is that we we did not pay the arrears yet. We have asked the FH for invoices that show the breakdown for the works done prior to us being the leaseholders but now he says that this is not a service charge but a management fee of £250 a year and his quote:
      Management fee is the agreement between freeholder and management company company and is part of freeholder's costs in performing the obligations.
      He is the FH and also the managing agent.

      The lease does not specify the management fee nor the service charge.

      Can anyone advice please if it's right to be charged management fee from the beginning of the lease even though we become the leaseholders late last year?


        I think the freeholder is deluding themselves if they think "management fee" is not a service charge, in terms of the legislation.

        In any case, I would say you have taken on the debts, of the previous owner, in relation to the lease.

        You only have a right to a breakdown of the works for the accounting year most recently ended.


          I do not understand, the lease should specify whether or not a service charge is payable and to whom it is payable. You mention a management company and again the lease should state whether or not one exists.

          The new freeholder cannot suddenly produce an invoice for a period prior to him acquiring the freehold interest. He also cannot claim a management fee payable to himself for what appears to be doing nothing more than arranging the buildings insurance.

          I would say that the ground rent and buildings insurance is payable from the date when you purchased the leasehold interest and not before. On the other hand, you are entitled to offset the proportion of the costs which you have paid and which should have been paid by the freeholder.


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