service charge deficit demand

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    service charge deficit demand

    Hello Guys, what would you advise regarding a service charge deficit I received today being demanded today for a period before I bought the property?


    #2
    You need to pay it. If this relates to an underpayment that the seller failed to disclose, you might then be able to sue the seller. If you mean a balancing charge because the payment on account was insufficient, you probably have no-one but yourself to blame, for not investigating the service charge finances adequately.

    The only exception might be if managing agent provided false information in relation to relevant questions on the solicitors' enquiries.

    Comment


      #3
      It depends on the amount and the reason for the deficit. If it is a large amount which the landlord or its agent should have been aware of when your solicitor was making enquiries, it should have been disclosed at the time and your solicitor should have withheld monies from the purchase price.

      Comment


        #4
        Originally posted by leaseholder64 View Post
        You need to pay it. If this relates to an underpayment that the seller failed to disclose, you might then be able to sue the seller. If you mean a balancing charge because the payment on account was insufficient, you probably have no-one but yourself to blame, for not investigating the service charge finances adequately.

        The only exception might be if managing agent provided false information in relation to relevant questions on the solicitors' enquiries.
        Thanks leaseholder64. Is it typical for a charge to be issued and demanded on the same day? What happens if I don't pay it today?

        Comment


          #5
          Looking at my lease, it appears I have 21 days...so, why would they demand payment the same day?
          Attached Files

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            #6
            You have 21 days to pay from the date of the demand, so 21 days from today.

            Comment


              #7
              Thanks for confirming, eagle2.

              Comment


                #8
                Just to update this thread. My solicitor has advised that because the service charge is for a period before completion, it is the seller's responsibility; hence they have reached out to the seller's solicitors regarding the service charge. I don't know how this will get paid so I will update again once I know.

                Comment


                  #9
                  Your solicitor should have withheld monies pending receipt of the accounts.

                  Comment


                    #10
                    Originally posted by eagle2 View Post
                    Your solicitor should have withheld monies pending receipt of the accounts.
                    Thanks eagle2. Could you elaborate a bit more on the "solicitor should have withheld monies pending receipt of the accounts"? Which monies and which receipt of accounts are you referring to? Thanks

                    Comment


                      #11
                      What he means is that, until the final amount due is known the solicitor should have kept some money, in the client money account, to pay for anything that the seller was still chargeable, and only pay the balance to the seller when everything was finalised.

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                        #12
                        Thanks LH64

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                          #13
                          Thanks for clarifying leaseholder64.

                          Comment


                            #14
                            My solicitor has confirmed that the previous seller has just paid the outstanding service charge deficit demand and here is my advise.... If anyone is in a similar situation where they just bought a property and you receive a service charge deficit demand shortly after exchange/completion, do not pay it. It is the previous seller's responsibility so get your solicitor chasing this.
                            Attached Files

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                              #15
                              You are fortunate, the vendor could have disappeared without trace. The best advice is for your solicitor to enquire if there is going to be a service charge deficit and to withhold monies from the sale proceeds.

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