Unresolved issues and charges when leaseholder sells

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  • Unresolved issues and charges when leaseholder sells

    Our BTL leaseholder is selling her flat. She is now ignoring all correspondence including a s20 consultation and a service charge demand. We have chased but nothing, not even a can we discuss this because I am selling.

    If she is still refusing to correspond when she sells, can we state to the buyer's solicitor that we are happy to co-operate and answer any queries once the service charge demand is paid and our issues are resolved?

    Also, can we withhold our Fire Risk Assessment on the basis that she refused to contribute towards the cost of it?

    Finally do unpaid service charges follow the property or the individual leaseholder?

    Thanks

  • #2
    Property, so she may well have difficulty selling.

    Im sure others can fill you in more.

    Andy
    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


    • #3
      Thank you Andydd. That takes the pressure off us a little.

      Comment


      • #4
        The answer to your last question is not that simple, read this:

        http://www.altermans.co.uk/news.html

        In practical terms I find that being completely unco-operative until such time as either the arrears are paid, or the solicitor gives me a formal undertaking to pay the arrears on completion normally works.

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        • #5
          If you are the freeholder, or you will be the one that is asked the
          questions from the buyers solicitors, you may bring to their attention
          that sevice charges are in arreas.
          They usualy ask if the ground rent and service charges are up to date,
          and if they don't then you tell them both must be paid in full before
          a license to assign the lease will be isued.

          things buyers / sellers solicitors will ask you are :-
          http://www.landlordzone.co.uk/forums...-can-LL-charge post 3 + 4.

          We send out our own License to assign, and deed of covenant,
          ( copied fron previous solicitors ones ) with some clauses added.

          regarding the new owner being responsible for payments due, that
          were discussed and agreed, maybe months before selling flat was
          even thought of, which means that decisions mayhave been made
          for example, Dec 2012, to receive payments towards the running
          costs, in September 2012 ( or a date after that to coincide with
          the payment date of servicecharges ) which every flat has to pay.

          If the flat is sold August, then each flat is still required to input
          the service charge in September, even if the new owner does not
          like that, We include in our licence to assign :-

          a sentence that in our opinion, is a must.

          "In the event that following the date of the assignment hereby
          authorised, any sum or sums shall properly fall due for payment
          by the lessee to the Landlord pursuant to the lease in respect of
          any period prior to such date whether by way of rent or otherwise
          the Assignee shall pay such sums to the landlord forthwith upon
          their falling due."

          You could decide a new roof is required, and that in 4 yeas time, it
          will be done, and gives the lesses 4 years to save up, and advance
          warning of expenses to come. The new leaseholder is bound by the
          above to pay their share.

          You should of course advise the buyers solicitors of any forthcoming
          one off large expenses due that year or within 3years, and the buyer
          and seller thrash out between them who is going to pay this large
          one off service charge.(may be dropping the sale price
          )
          So, are you the one who will be asked to assign a lease ?

          R.a.M.

          Comment


          • #6
            Thanks to all for this. I share the freehold. The lease is post 1997 which concerns me slightly as I am sure we will never track her down again so Ram's advice and wording is helpful.

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            • #7
              I agree entirely with Tulula, and would emphasise that the solicitor not the owner undertake to pay, and moreover, to undertake that that should those instructions be changed you must be immediately notified.

              There is no obligation whatsoever to cooperate with enquiries, and if you do, ensure that your cost of doing so are paid in advance.

              http://www.brethertons.co.uk/Content...0is%20sold.pdf

              What it adds up to is that who is responsible for arrears depends, mostly,on the lease date and wording.

              If she ignores the Section 20 correspondence than that is her choice, but be aware that the demand must be calculated and billed in accordance with the lease, and contain the information under section 47 & 48 of the LTA 1987 and the Summary of Rights, otherwise the purchaser may withold payment.

              The simplest answer is to have your solicitor send a letter before action to her and any mortgagee indicating that you intend to take forfeiture proceedings for the unpaid amounts. That should extract a response. You can also consider either a claim in the county court, and my personal favourite is that on judgement you will ask the court to order that future rent payments are made direct to "you" to clear the arrears.

              Finally (!) the BTL owner is in business, be business like and hit them with proceedings.

              Good luck.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


              • #8
                As said, Tulula's advice maybe the one you may have to go with
                in your current circumstances.
                E.G. state that until the service charges are paid, no assignment
                of the lease can be authorised.
                ( none payment of service charges is a breach of the lease, and flat can be forfeited [ leasholdanswers ]

                This effectively stops the sale of the flat !

                And with the all the answers on here, you should get something
                moving on the unpaid service charges.

                My recommendation on the added parragragh ( "is a must" )
                is not for unpaid service charges, but helps secure payments, when
                payments are due, PROVIDED all anticipated costs up to 5 years in
                advance are recorded in your information to the buyer.

                It recently ( "is a must" ) got us out of an argument, and much
                wailing and nashing of teeth, once pointed out, together with the
                "future costs" statement.

                Be careful though, we had buyer move in and no license to assign
                the lease had been signed by us, so hound the solicitors with your
                stipulations on assigning a lease.

                R.a.M.

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