Management company demanding previous owner’s service charge?

This was for your solicitors to ensure there were debts at exchange !

As the debt is for a specific period and you were not the legal owner at that point in time you have no liability

Pass onto the management company the details of the previous owner's tel no and sellers solicitor

This isn't entirely true so I would tread softly with the management company because there are a few hurdles to cross.

1. Were the arrears disclosed to your solicitor. There is no obligation for the seller to do so, but if they did, your solicitor should have taken them into account at completion, or insisted on a retention.

Shinh is correct that under The Landlord and Tenant (Covenants) Act 1995, the arrears remain the liability of the previous leaseholder and do not pass on to the new owner. However, if there is evidence of a breach of lease by the seller (and not paying the service charge is a breach of the lease),
forfeiture proceedings can be brought against the new owner of the flat so try to work with the management company rather than ignoring them

I had a similar problem when I bought a property 3 years ago. No proper accounts had been drawn up for 2 years and I was concerned that there might be previous underpayments. I wanted my solicitor to keep a retention of £1,000 for 12 months until the accounts were produced. The vendors were OK with this but my solicitor was not. She said we will have to keep the file open for up to 12 months and seemed to suggest that this would be a problem and maybe expensive?? so I didn't bother. (The seller's solicitors said just as likely to be a refund, ha-ha, which planet do they live on).You know what's coming next - 8 months later the accounts were produced and there was a £600 shortfall which I had to pay. Not worth the hassle of trying to claim back the £600 from the solicitors but obviously have not used those solicitors since.

Your son should contact his solicitor in writing and copy this to the practice manager and senior partners. ALL correspondence should be copied to the managing agents/freeholder.

He should also state that any legal repercussions or costs imposed by the management company will be sought from their professional indemnity insurance as he had tasked the firm to deal with the service charge proportion due from him, and via the seller's the sellers contribution.

That might get some action.

Your son needs to liaise with the management company. They can only work with the information they have. If the property was rented prior to your son's purchase it's with the owner to ensure management fees are paid. Most management companies understand the complexities of change of ownership and will work with you to resolve issues.

Reply to the comment left by Dennis Forrest at 08/01/2024 - 11:33
Solicitors don't like retentions because of Money Laundering Act legislation which imposes obligations on them when holding money in a client account. That said its part of their role so I would have told them to hold it or face a complaint to the SRA

Reply to the comment left by Tim Peters at 13/01/2024 - 08:24
thanks for your comment - it was only £1,000 I was asking them to hold for a maximum of 12 months. I should have been more insistent.

It is not clear whether the management company is in fact the managing agent acting for an external freeholder and/or a management company acting on b/h of a landlord/lessor.

Either way the conveyancing solicitor for the purchaser of the lease to the flat is required to obtain a copy of the last three years certified service charge accounts showing the unpaid service charge contributions apportioned to the flat payable by the then flat owner.
That these accounts were not provided nor requested by purchasing solicitor is a red flag.
I’d be wondering whether there is/was a dispute over service charge accounts and the vendor cut their losses and sold up.
The purchaser should not have agreed and paid the premium to the purchase of the lease a legally binding contract.
As we all know now from Post Office scandal do not sign off accounts as it confirms acceptance

Whilst service charges are being discussed I hope someone knows the answer to this question/problem.
I own a flat in a very modern block built in 2017. It has one of these CHP heating systems and the management company buys the gas on a commercial tariff via a broker and gets the money back via a PAYG meter in each flat. The problem is there is no transparency. The gas bills they pay are not shown in the annual service charges accounts and neither are the receipts they get back from Insite who supply and maintain the PAYG meters. I did find out recently from the property manager (who has since left) that they were currently paying 12p per KWH on their commercial tariff but the heating and hot water in the apartments is being charged out at 36p per KWH. I realise that even efficient gas boilers are not 100% efficient and there will also be heat losses from the pipes, (even though they are insulated), which go round the building over 3 floors, but 36p per KWH is very expensive. Full price electric underfloor heating and immersions heaters would work out cheaper with virtually no maintenance. We pay several hundred pounds a year in service charges to maintain this CHP system and also money is put in to reserves for its eventual replacement. Without any proper accounts available to leaseholder how do we know that the management company is not just taking a substantial cut/profit from the price difference? I know they are not supposed to but how do we be certain that everything is above board?

Hi Martin, I'm at the same situation with your son and wonder if your dispute has been resolved yet. and what the solution for this was eventually? I'm even thinking of raising a small amount claim on Gov website..

Thanks.
CS