Misled by management company during a flat purchase

[triteata]

Hi lovely people, looking for some advice!

I purchased a leasehold property and 9 months (!) after completion It transpired that a delayed service charge of £800 is due for the previous year.

During making the deal, the Management Company filled in an enquiry supplied by my solicitor. There was a question if there are any excess payments anticipated, and the answer was "The certified accounts are not yet in hand from the accountant, however, we suggest a retention of £100." This is what my solicitor did, and we signed that no further excess can be sought from the seller.

Now the Management company is seeking the full payment from me even though they clearly misled my solicitor.

I'm also less than impressed with my solicitor as agreeing to retain an amount this small makes no sense given the annual service charge is £2,500 - and they never bothered to check what the typical delayed charges have been in the years prior.

Do I have any good options here other than to pay? Clearly I don't want to breach my leasehold agreement but this feels very unfair.

I'm not sure you can say they clearly misled you when they told you that the accounts weren't finalised yet? They won't have known what the difference was

Did you review the previous years accounts and know what the prior charges had been?

Did your solicitor not ask for a retainer?

The agency "suggested" retaining a £100. They could very easily see that such a low sum is inadequate based on past amounts - but clearly they didn't.

My solicitor agreed with their suggestion and retained £100. Her experience should have made it clear that this sum is too low (to me it's very obvious now when I think about it), but she didn't question it.

If any of the 2 parties had done properly what was asked of them, we would not be in this situation. That's why it feels unfair that I have to pay it now.

Do I have any legal basis to refuse payment or claim compensation?

This is what my solicitor did, and we signed that no further excess can be sought from the seller.

What does this mean? That you (both?) signed an agreement that a payment such as this £800 couldn't be sought later? Or something else?

This is on you and your solicitor. The debt goes with the lease. Is it a balancing payment because there's a deficit from the previous year, or had the previous owner not paid their bill in full?

You saw the documents from the management company before you exchanged contracts & didn’t question it.

Caveat Emptor is the rule with property purchases.

@PsychoHotSauce we signed that no further funds can be requested from the seller - I don't expect any further payments from them.

@TheOccupier yes, it is a balancing payment for the year before purchase.

The management company clearly gave a bad "suggestion" but given it's simply a suggestion, I guess they can't be held to account and I can't deny payment on these grounds. Did I get this right?

The solicitor clearly didn't question anything. They should have done given it's their job to represent my interests. I should be entitled to some compensation from them considering the bad job they did. Would you agree?

Thanks so much everyone for chipping in and helping!!

Hi @triteata

The management company clearly gave a bad "suggestion" but given it's simply a suggestion, I guess they can't be held to account and I can't deny payment on these grounds. Did I get this right?

Yes. Your lease probably has a clause in it saying that the landlord can collect any deficit from the previous year.

The solicitor clearly didn't question anything. They should have done given it's their job to represent my interests. I should be entitled to some compensation from them considering the bad job they did. Would you agree?

No, afraid I wouldn't. Knowing about this wouldn't have changed anything. You did well to get even £100 retained! If there's usually a catch-up payment to be made after the previous year's accounts are finalised then I imagine that the previous owner was in the same situation you are now when they bought the flat. When you eventually sell it, the new owner will probably end up covering the deficit from your final year there. Let it go.

Hi everyone,

An update in case it's useful to anyone who stumbles upon the thread.

I threatened our solicitors with filing an official complaint as in my view they were too careless to agree such a low retainer. With no explanation or admitting guilt, they posted me a check (lol) for the full amount of £800. Perhaps they just couldn't be bothered? Either way, I was happy with the result. Worth pushing for your rights!

Surprised, but very pleased for you.