Former leaseholder's right to challenge historical service charge after a sale?

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    Former leaseholder's right to challenge historical service charge after a sale?

    Hi, I’m just about to sell my long leasehold flat (in England), but I’d like to be able to apply to the First-Tier Tribunal after the sale in order to recover some of the service charge overpaid by me over the past few years. (I need to do it after the sale as the buyer is insisting on a "clean slate" before completion.) I know I would win if I were still the leaseholder, but does a former leaseholder still have standing to make a claim and recover overpaid charges, or does that right transfer to the new leaseholder upon sale? And if the latter, is there any way of reserving this right to the seller, or having the buyer assign the right back to me, in the sale contract?
    Many thanks.

    #2
    All rights under the lease of the flat transfers to the next leaseholder so you do not have any rights after registration of new owner at Land Registry. Any unspent service charge money is normally held and spent by the managing agent and is not returned to individual leaseholder after sale of each flat.

    You should send an enquiry to the the legal advisor at www.lease-advice.org to ascertain if you have any claim under "clean slate" condition required by the buyer.

    Comment


      #3
      Thanks for taking the time to reply. I feared as much, although it seems very unfair that a leaseholder's right to challenge the service charge for current/recent years is effectively extinguished when the flat is sold. Most applications to the FTT are made at least 6 months after the relevant service charge period, to give time for the summary of costs to be prepared and the evidence of expenditure to be provided, so whenever the flat is sold there will be a delay in gathering that information, possibly 18 months or more if the sale occurs near the beginning of a period. Is that just an anomaly in the law?

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        #4
        No..Its not an anomaly..Leases are contracts between The Leaseholder and The Freeholder, these 2 parties will change over the years but the contract remains between whoever is LH and FH at the time. After the sale, you will not be the LH, the new owner will be.

        This is different to most contracts which are between you as an individual and another party.

        Only think to check is what happens if you make an application to FTT/Court now but you arnt the LH by the time its heard.
        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

        I do not accept any liability to you in relation to the advice given.

        It is always recommended you seek further advice from a solicitor or legal expert.

        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

        Comment


          #5
          It is a very good point, at the time of a sale, the accounting information is usually between 6 and 18 months old and in extreme cases, it can be much older. The solution is to attempt to reach agreement with the freeholder/management company prior to selling or make an application to a Tribunal before selling. I cannot see that any purchaser would agree to commence legal proceedings and account to you for any benefit.

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