2009&2010 Mgmt Fee owed- can the apt still be sold?

fizzelina · #1 28-07-2010, 08:08 AM

Hi,
If the Management fee for 2009 and 2010 is still owed on an apartment, can that apt still be sold? What is the situation with new owner, would they take over from 2011 paying mgmt fee, would they be liable for the unpaid amount? Would they include in sale contract that fees had to be paid?

jaykayphd · #2 28-07-2010, 09:10 AM

The apartment cannot be sold without all fees being settled first.

Also the buyers solicitor will contact the management company to find out if fees are owing.

mf1 · #3 28-07-2010, 09:14 AM

The fees are payable by the owner up to the closing date. Any overpayment can be apportioned between the parties. It is a fairly standard query raised and is one that the vendor should anticipate and deal with in advance of selling the apartment.

If it slipped through the loop though then a new owner could find themselves with the responsibility for outstanding fees.

mf

jaykayphd · #4 28-07-2010, 09:19 AM

Also see this post.

purpeller · #5 28-07-2010, 09:47 AM

A situation relating to this has developed in my building. Owner wanted to sell and had unpaid fees. Our agent has been instructed to "freeze" accounts of those unpaid debtors and not assist with things like requisition 37s (replies to queries asked of the management company when a sale is going through, which the agent answers) and meter readings. This particular owner took matters into their own hands, their solicitor completed the requisition 37s and the sale went through. The new owner now owes the balance of unpaid management fees which he/she did not incur. The buyer's solicitor should have been more thorough here but the end result is the same....we're going to have major trouble getting those fees.

Mrs Vimes · #6 28-07-2010, 01:22 PM

Purpeller, I would suggest sending a letter to the new owner telling them how much is outstanding and that they are now the ones who owe it. Suggest they contact their solicitor if they did not agree to be responsible for the arrears. Either their solicitor closed the sale without getting the req 37 or the vendor/vendor's solicitor provided false req 37 details.
Sybil

markpb · #7 28-07-2010, 01:27 PM

Quote:

Originally Posted by purpeller

This particular owner took matters into their own hands, their solicitor completed the requisition 37s and the sale went through.

How did that happen? I thought the purchasers solicitor requested the R37 form?

Padraigb · #8 28-07-2010, 01:44 PM

Quote:

Originally Posted by mf1

...
If it slipped through the loop though then a new owner could find themselves with the responsibility for outstanding fees.

And have grounds for a complaint against his or her solicitor.

purpeller · #9 28-07-2010, 03:27 PM

Quote:

Originally Posted by Mrs Vimes

Purpeller, I would suggest sending a letter to the new owner telling them how much is outstanding and that they are now the ones who owe it. Suggest they contact their solicitor if they did not agree to be responsible for the arrears. Either their solicitor closed the sale without getting the req 37 or the vendor/vendor's solicitor provided false req 37 details.
Sybil

Thanks, we're well on top of it. I wanted to just illustrate that things can go wrong even though the OP was correct in presuming an apartment can't be sold without clearing the fees.

Markpb, yes sorry, must be the purchaser's solicitor. It's not the first time it's happened either. We have one other person whose sale closed the week we were changing from the old (crap) management agent to our new one and the debt slipped through. We're pursuing this owner too but have made it clear we know the debt it older. It's up to the current owner to go back to their solicitor.

mf1 · #10 28-07-2010, 04:02 PM

Quote:

Originally Posted by Padraigb

And have grounds for a complaint against his or her solicitor.

Not if the solicitor pointed out the problem and the purchaser wanted to go ahead anyway!

It is not a title problem so does not affect the ability of the solicitor to negotiate the loan cheque but it could be something like a purchaser trying to close a sale and a purchase on the same day, needing everything to go like clockwork and just not having any "wriggle" room when an issue like this crops up.

Or, yes, it could be the solicitor! Or the management agent! There is nothing like a receipt for payment to put the matter beyond debate.

mf