If you own a flat or maisonette where the landlord or a management company is responsible for the upkeep of the structure and common parts, arranging buildings insurance or providing services such as redecoration and cleaning, you'll have to pay a share of the expenses as a service or maintenance charge.
In such cases, the management company, the landlord or their agents will prepare an estimate of the anticipated expenditure for the following 12 months and the lessees (the owners of the individual flats) will usually have to pay their estimated share in advance.
Services charge periods generally run for 12 months for examples 1st January to 31st December. At the end of this period, the actual expenditure is compared with the earliest estimate, and lessees either have to pay any shortfall or receive a credit towards the next year's payment.
When a leasehold property which is subject to a service charge is sold, the seller must pay the proportion of the annual service charge up to the date of completion, and the buyer from then onwards according to the number of days each owns the property. If when the end of year accounts have been finalised, the seller has paid more than their share, the buyer might be asked to refund the difference. And if the seller has paid less, a payment should be made to the buyer as the 'arrears' will become their responsibility. The seller's solicitors should retain an agreed amount sufficient to cover excess charges that may be levied after the sale is completed. Without such retention, while the seller is contractually liable for their share of the excess, collecting it might prove difficult.
Philip Popeck is a Partner at Curry Popeck, solicitors.
Call him on 020 8907 2000, or email him at philipp@currypopeck.com.
|
