Apportionment from flat sale gone wrong. Who's error?

[thurstonbokris]

Hi everyone,

First time posting on here! I haven't found any help on google about details for when service charge apportionment should get paid on a leasehold flat in a cash sale.

I bought a flat in a block, and completed in mid October. I exchanged on a Thursday and set completion for the following day. On Thursday after exchange, I was informed of the service charge apportionment amount i was required to pay, £500 or so from mid-Oct to Mar 2018. I transferred the amount for the flat plus the amount of the apportionment to my solicitor, who the next day told me "all good completion is now done, you can pick up the keys". All good I thought, thinking my service charge is paid off until mar 2018.

I have since put forward a leaseholder alteration request to the freeholder of the flat, to make some changes to my bathroom, and have found it was denied because of outstanding service charges. I queried this and was shown a bill of the service charge statement for the flat in my name, and the service charge had not been paid off in full to Mar 2018 by the previous sellers. Oddly though, they had paid another month of the service charge via the previously set-up direct debit.

It would appear and was explained by my solicitors to me, that the sellers 'forgot' to pay the service charge off and they are doing this now. But I am amazed that this wasn't done before, or that my solicitor didn't make them pay/check they had paid etc or keep tabs on this. I'm generally a little confused that I was put in a vulnerable position where it seems the sellers could chose when (if at all?) to pay their remainder of their SC apportionment and my apportionment amount of £500? And this is happening after completion? My solicitor isn't saying explicitly they have done something wrong, so I am wondering if it is the fault of my solicitor?

note about the SC billing: The service charges are billed upfront from March - March as an estimate, and then each month the owner of the flat pays a set amount with direct debit to pay it off. An adjustment (usually refund) is made at the end of the financial year in April.

Does anyone have any information about this? It would be really helpful to know where this error has happened.

Thanks! TB

I’m not sure why you gave the money to the solicitor and they passed it on. It sounds like it was your liability as the flat was in your name for the period due so it would have made sense for you to pay to the management company rather than a chain of people get involved.

It sounds as though everyone thought (in error) that the service charges were paid in one lump sum upon receipt of the bill. I anticipate the sellers solicitor told your solicitor that the seller was entitled to a refund for 6 months of so of service charge, your solicitor got the money off you and passed it on to the sellers solicitor (this would be quite normal if it were paid upfront). It would appear that this error has come to light and everyone is now running around trying to correct it.

As long as the service charges are in fact paid, that should resolve it (and get written proof that they are). Whatever has happened, it sounds as though you've had poor service and you can complain to the solicitor that you've had the inconvenience of dealing with this.

Thanks for your opinions!

In hindsight I don't know why we paid this to them either, but I was told it would be settled and paid up on the day of completion, and therefore I assumed it was part of the completion process, but it seems that wasn't quite the case.

Fingers crossed it all goes through asap.