Kafkaesque Notice of Transfer situation

[westminster2]

I don’t fully understand the situation, but I’ll explain as best I can.

I sold a long leasehold in Autumn 2017. My solicitor held a retainer in respect of service charges, I think because the Autumn 2017 s/c bill (for y/e Spring 2018) was estimated, not ‘actual’.

I was, at the time, disputing an earlier s/c; and after lengthy correspondence, in Winter 2019 the freeholder finally admitted it had overcharged me several hundred pounds in respect of the y/e Spring 2017.

The service charge for y/e Spring 2017 having been finalised, and the actual sum for y/e Spring 2018 by then known, my solicitor dealt with the retainer, sent monies to the buyer’s solicitor, and refunded me the balance.

Meanwhile, I discovered that the service charge remained in my name, because the Notice of Transfer had been rejected by the freeholder in Autumn 2017 due to arrears on the service charge account.

The service charge remains in my name. The arrears now exceed £2,000.

I continue to correspond with the freeholder’s accounts dept. (It may be relevant to note that the freeholder is a Local Authority, and I’ve been dealing with multiple people over the years, at an outsourced accounts department).

They tell me the buyer’s solicitor must re-submit the Notice of Transfer, and the s/c due at the time of sale must be paid (about £700). They reiterate that I remain liable for the ongoing s/c of £2K+. They refuse to contact the buyer or the buyer’s solicitor.

I have of course been in touch with my solicitor several times, and AFAIK I have paid whatever I was meant to pay. My solicitor says he will chase the buyer’s solicitor, but nothing ever happens. I gather the buyer’s solicitor simply fails to respond.

And so it goes round in circles.

Does anyone have an ideas as to how to sort this out?

Also, am I actually legally liable for s/c beyond the sale date? Given that I have no control over the buyer’s solicitor re-submitting the Notice of Transfer? (I can’t immediately find a copy of the lease, but will dig it out if essential).

P.S. Old timers may remember me as the user formerly known as Westminster. Following the sale of this leasehold flat, and after many years of various leasehold nightmares, I am now a happy freehold owner. (And no longer an AST landlord).

[Lawcruncher]

Nice to see you back. We miss you!

"Meanwhile, I discovered that the service charge remained in my name, because the Notice of Transfer had been rejected by the freeholder in Autumn 2017 due to arrears on the service charge account."

A notice of transfer cannot be rejected for any reason. Consider its purpose: to let the landlord know there has been a change of tenant. something the landlord needs to know. It is not some procedure required to perfect the transfer. The landlord does not get to decide who his tenants are. If the transferee is registered as proprietor at HM Land Registry that is evidence that the transferee is the tenant. If it were otherwise the system of land registration would be undermined.

If the lease was granted on or after 1st January 1996 then you were released from your obligations on the transfer (assuming it was not an unauthorised transfer): Landlord and Tenant (Covenants) Act 1995 (legislation.gov.uk)

As an aside, the transferee seems to have yet another supine solicitor. He should have challenged the purported rejection of the notice.

[westminster2]

I miss you too Lawcruncher! Many thanks for your extremely helpful reply and link. (The lease was 'extended'/new lease granted when I bought the flat, which was post-Jan 1996).

What you say makes perfect sense, of course. It's what I suspected but I needed more solid ground, and now I have it in the form of your expert opinion, and statute to boot

I will now ask the accounts person who is currently pestering me to provide legal arguments in support of his position, and take it from there. I'll keep Section 5 Landlord and Tenant (Covenants) Act 1995 in reserve for later deployment.

The only remaining question is the matter of the s/c owing at the date of sale, - the sum which would've been apportioned between me and the buyer. According to the freeholder's recent s/c statement of account, no payments were made in settlement of the estimated s/c which fell due just before the sale in Autumn 2017. When should it have been paid and by whom? (given that it would've been apportioned, would my solicitor have paid my portion to the buyer's solicitor?) I'll ask my solicitor also, but as you may have gathered, he hasn't been very helpful overall in terms of trying to resolve this.

[Lawcruncher]

I would bring section 5 up straightaway. It should short-circuit things.

As to your last paragraph it will depend on when the lease makes the payment due. If the amount had not been calculated before completion I do not see how it can have been due before completion.

[Gordon999]

I think you can report your buyer's solicitor to the SRA ( Solicitors Regulation Authority )

[Lawcruncher]

I think you can report your buyer's solicitor to the SRA ( Solicitors Regulation Authority )

Not sure there is any justification for that. It seems he served notice of assignment. It is not his fault if the landlord purported to reject it, though one would have expected him to follow it up, which he may well have done. It is also not his fault if the landlord has the law round his neck. Even if he had failed to serve notice of assignment Westminster is not his client.

[Gordon999]

Its worth trying because it does not cost W2 much to make the complaint to SRA. The solicitor firm , although W2 is not their client, is covered by liability insurance for mistakes .

[Macromia]

Its worth trying because it does not cost W2 much to make the complaint to SRA. The solicitor firm , although W2 is not their client, is covered by liability insurance for mistakes .

The problem is that, if reporting like this is used too often in circumstances when the person being reported hasn't actually done anything wrong, it diverts resources from investigations into people who genuinely do need to be investigated.

[Lawcruncher]

The SRA only deals with misconduct. If anything is involved here it is negligence (and even that looks very doubtful) and the solicitor owes no duty of care to Westminster. For other complaints the Legal Ombudsman is the one to contact.

[westminster2]

I would bring section 5 up straightaway. It should short-circuit things.

As to your last paragraph it will depend on when the lease makes the payment due. If the amount had not been calculated before completion I do not see how it can have been due before completion.

Okay, will do.

I'm fairly certain the estimated s/c was due at the time of completion. It was always invoiced mid-financial year in the Autumn (estimated, then adjusted the following year).

Regardless, it doesn't seem to have been paid, according to the statement of account. But there were a couple of mystery 'receipts' in early 2020, two months apart - not enough to settle the s/c due at the date of completion, however. I have asked the accounts person who made these payments.

[eagle2]

The service charges should be apportioned up to the date of sale. The lease usually requires estimated amounts to be paid in advance so you would normally be entitled to receive a credit with a further credit or deduction depending on whether or not the actual expenditure was less or exceeded the budget. The actual amount cannot be calculated until the annual service charge accounts are prepared so most solicitors hold monies back in case there is an additional payment to the purchaser.

[westminster2]

The accounts person ignored my reference to Section 5 Landlord and Tenant (Covenants) Act 1995. So I said please pass the matter to the landlord's litigation solicitors, - that the only way forward was to bring a claim against me. That was a month ago. I'll chase in a couple of weeks if nothing happens.

But there were a couple of mystery 'receipts' in early 2020, two months apart - not enough to settle the s/c due at the date of completion, however. I have asked the accounts person who made these payments.

They told me the payments had been "removed" from the account since I had said I hadn't made the payments. No further explanation offered.

[flyingfreehold]

if i were you I might download for £3 and send to the landlord a copy of the registered entry showing the name of the current lessee and his address for service. It will show the date of registration and the date of transfer. I would add that I have no interest in the lease and so far as I am concerned you can try to forfeit

i am sorry that the local authority, or the people to whom they have outsourced are so stupid and ill informed

[westminster2]

Thank you flyingfreehold. I'll download the registered entry to submit as evidence should the LA proceed with a claim again me. The outsourced accounts people don't deny that there is a new leaseholder, they just doggedly insist that I'm liable. The only way forward is for the matter to pass to the LA's solicitors, i.e. people who might be acquainted with the law.

[Lawcruncher]

The only way forward is for the matter to pass to the LA's solicitors, i.e. people who might be acquainted with the law.

Given some of the stuff we have seen on here lately, don't bank on it!