Large amount of service charge arrears from previous leaseholder

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    Large amount of service charge arrears from previous leaseholder

    Hi wanted some advice as I have been sent a large leasehold service charge arrears bill from the management company (over £4,500) and from the invoice 99% of it (if not all of it as the breakdown of dates on the invoice is confusingly laid out) was for the period before I took over the lease. It is for gas charges, maintenance and also redecorations, and dated in three sections, two of which say balance as of 25/12/2018 brought forward and one saying 25 Feb 2018-25Feb 2019

    I completed the purchase of the lease on 11 Feb 2019.

    I am also having difficulty with getting the seller's solicitors to cover this cost, they are saying £2000 was agreed during the sales process, which is an outright lie as no explicit sum was agreed and my solicitors told me that around £2600 was the arrears on 4 Dec 2018 and this would all be covered by seller.

    I have gone through their internal complaints process and they maintain the responsibility for paying arrears passes to whoever the current leaseholder is (which I don't think there is a default legal basis for, nor does it say so in the lease contract). I can now take it forward to the Property Ombudsman, just wanted to know from anyone with similar experiences whether I should bother or is this a waste of my time.

    Would your own solicitor not have enquired the arrears from the freeholder?
    To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.


      It is normal for service charges to be treated as if they are debts that 'belong' to the property rather than being debts owed by a specific person.
      When a leasehold property is sold the buyers solicitor (if they have engaged one) should make enquiries to the freeholder and/or the managing agent managing the property to find out what the service charge period is, and how much is expected to be owed with respect to the period before the sale is completed.
      Usual practice would be for the buyers solicitor to arrange for there to be a 'retention' of an amount of money considered appropriate to cover any arrears/ or expected service charge balance that had yet to be billed.

      The only reason you might possibly have for going to the property ombudsman is if you have evidence that your solicitor made proper enquiries about the service charges that were owed and was given false information, by the managing agent.
      Whether your solicitor made proper enquiries, and what was actually agreed regarding a retention/payment of the service charges is more likely to be the issue here.


        The Property Ombudsman is unlikely to assist you, he/she will not usually become involved if there is a legal issue which can be resolved in court or by a tribunal. I recommend that you go back to your solicitor and ask him/her to insist on the vendor settling the arrears at the time of the sale. If the amount retained is inadequate that is a matter to take up with your solicitor.


          Thanks all for responses so far.

          To add further detail that was provided by the managing agent, these arrears were notified to the seller of the leasehold title. With the redecoration costs of £2,484.88 notified on on 15th June 2018 as per s20 of the Landlord and Tenant Act 1985. As mentioned, the seller solicitors had retained £2000 as an estimate for the outstanding balance of normal everyday service charge, but even this was below the amount I was advised by my solicitors they would retain, which was supposed to be over £2600.

          Now someone else has told me in a situation where a previous leaseholder was made aware of the exact amount of outstanding arrears, the managing agent have a weak argument to say I should be liable for them, at least in terms of having a cause for legal action for forfeiture. Is this correct?


            No. If your own solicitor was made aware, but still goofed up and handed over the cash, then you are liable for the balance. Your only option is to ask your solicitor to reimburse you, but I doubt you'll get anywhere with that.
            To save them chiming in, JPKeates, Theartfullodger, Boletus, Mindthegap, Macromia, Holy Cow & Ted.E.Bear think the opposite of me on almost every subject.


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