Advice On Service Charge Arrears When a Property is Sold

With the explosion in the number of leasehold properties around the country in recent decades, service charge arrears problems has increased. Knowing how and what to do to pursue debts from former owners is crucial for property management companies and fellow leaseholders if the property is part of a block of apartments.

In the vast majority of cases where a lease holder sells a property, service charges will be paid up to date but there will unfortunately be those individuals who effectively try to escape from their obligations and expect the new property owner to deal with the repercussions.

Of course the buyer should in all cases use a specialist leasehold conveyancing solicitor to ensure that service charge payments were up to date before completion of a sale. This isn’t always the case if buyers simply opt for the cheapest service to try to save money. As with all things involving the transfer of large sums of money, everything should be handled with the utmost care.

If a property is sold with service charge arrears, property managers sometimes believe that they should be chasing the existing owner for payment rather than the previous leaseholder. In fact the opposite is true under The Landlord and Tenant (Covenants) Act 1995.

If the service charge payment isn’t made prior to the sale then action can still be brought to Country Court to secure a judgement and then proceed with enforcement action against the new owner for breach of the lease.

For more assistance please call one of our specialist team on 0800 002 9049.