Day before moving in Solicitors have suddenly added almost double to charges

[Jenasaurus]

My DS and his DG have bought their first home and moving in day is tomorrow. My DS has just received a bill for £3000 despite being advised it would be £1600. They paid separately for Stamp Duty a Deed of Trust and some other things and are both shocked at the additional charges. When they examined the bill. One item was for Service Charges which they are meant to be paying monthly to the lease holder but have got an item for £1400 for the full amount included on the bill. My DS is anxious as tomorrow is moving in day and this hidden amount has just been shown to them. He called them but the secretary advised the solicitors are all in meetings and unable to speak to him or his GF until tomorrow (moving In day). Can a solicitor suddenly add charges like this at the last minute without notice or explanation.

A leaseholder? What type of property is this, as that may impact what their rights are? And where was it agreed they'd pay monthly? If they have that in writing, they should pay the £1,600 they were told of and then dispute the rest. They will be able to move in as usual and work to get it changed to a monthly fee, if that's what was set out.

The solicitor hasn't added charges. It sounds like the outgoing seller has already paid the full year's service charge and the cost is being apportioned. Ask your solicitor in the morning for a copy of the service charge receipt.

Why do people buy leasehold properties? We don't have those here and I just don't understand the appeal.

It should all be detailed in the closing statement and the solicitor should be happy to explain it. There’s a duty of care now so they have to explain the likely charges up front, but it does sound like a miscommunication about the service charge, rather than the solicitors fees have inexplicably gone up.
TheInvestigator - the majority of flats are leasehold. There’s no ‘appeal’, that’s just the way they are.

It is quite normal, he will pay the leasehold fee upfront via the solicitor who will then pass this on as appropriate.

It’s not a charge the Solicitor is making. It’s service charge to the managing agent/freeholder.

Some managing agents (the people who collect the service charge) require payment for the coming year at the beginning of the year, as they need the money to pay the bills. In those cases a monthly payment arrangement would be for next year, not this one. What does his lease say about payment?

Sane thing happened to us, only a 2k bill became £5600. The day before completion. Completion was held up a couple of days while we desperately tried to find the extra money. The blame I think needed to be shared. We were a bit naive about what costs were going to be and hadn't thought about it properly. If we had then we would have realised it had to be more. But the solicitors could have easily been far more proactive in ensuring that we weren't surprised by the extra costs instead of assuming we knew and had budgeted for them.

Moral of the story for us: Ask your lawyers to spell out the costs well in advance and check for changes through the process. And keep a bit of money back for unpleasant surprises.

The solicitor hasn't added any fees. It's all down to how the managing agents charge

'Why do people buy leasehold properties? We don't have those here and I just don't understand the appeal.'

They are standard in UK for eg flats and have been for centuries.

The idea itself is perfectly OK.

There is a massive problem at the moment where property developers have realised they can abuse it by applying it to properties more generally (ie not ones where it is the norm/there's no reason for it) and ramp up fees quickly, this needs to be stamped out ASAP.

If you buy a flat in England it's going to be leasehold, it's not too do with 'appeal' it's the norm for certain types of property.

Why do people buy leasehold properties? We don't have those here and I just don't understand the appeal

Not much choice in the Uk (England and Wales), sadly. The norm for flats and some unscrupulous builders are making houses leasehold too - I certainly wouldn't buy a leasehold house. There was a new model for flats called commonhold but it didn't catch on.

Luckily In Scotland there isn’t leasehold but there is usually a service charge if you live in flats.

Most likely the previous owners had already paid the service charge in advance and this is reimbursing them for the remainder of the year. If it's a payment to the leaseholder I don't see why it would come through the solicitors.

It does seem odd. I live in a leasehold flat and didn't get a bill for ground rent and service charge until almost a year after moving in.

It’s not a “bill” it’s a legitimate cost as pp have said. The current owner will have paid service charge and ground rent for the current period, your DC needs to reimburse them for any amount from the day of completion and beyond.

This should have been in their report on title (which people often don’t read). Service charges are often also in agents particulars. They are also considered by mortgage lenders and often detailed in their valuation report and offer. So your DC should have been aware of their existence.

@SparklyLeprechaun

It comes through the solicitors as it’s an amount due to the seller upon completion. The standard conditions of sale call for apportionments due to the seller to be forwarded together with the purchase price on completion.

The solicitor isn’t charging more, is not as if the extra money is going to them. It’s down to the service charge and ground rent, it could also include notice fees payable to the freeholder and management company. I wouldn’t buy a leasehold property, it’s a money making scheme for freeholders and management companies.