This is a charge which covers the maintenance and upkeep of the shared areas in a block of flats such as corridors
When is Service Charge Paid?
It depends on the contents of the
Lease. Sometimes an "on account" payment is made either quaterly or half yearly in advance and sometimes it
is paid monthly.
How is the amount of Service Charge Decided?
It is decided by the Landlord and has to be considered "reasonable". If they are not considered
reasonable action can be taken at the Leaseholders Valuation Tribunal (LVT).
What do you do about Ground Rent & Service Charge when dealing with conveyancing?
There is usually three situations:
- That the Tenant has not paid the Ground Rent or Service Charges. In this case
we will ask for a Binding Undertaking from the Sellers Solicitors to pay that money on completion. An Undertaking is
a written, signed promise to do something.
the Tenant has paid the Ground Rent and Service Charge in advance. In that case they will require reimbursement
by the purchaser. If this is the case the money will be needed before completion.
- That the Tenant has paid up to the date of completion.
In those cases no money needs to be paid to the tenant and they do not need to pay anything to the purchaser.
If the Tenant has paid all that is demanded to date, do you need to look at anything else?
Yes. We need to check that the tenant has not been undercharged.
If they have been and a further demand is made, then you as flat owner would become liable. If, after enquiry is made,
we discover this is a possibility, we ask for the money to be retained from the sale price to cover this.