Am I liable for previous leaseholder’s debt?

Reply to the comment left by Kizzie at 16:09

Kizzie, you write: “You buy the lease to the property and the arrears.” and “Otherwise it is an ongoing issue. It suggests the former leaseholder knew the management co. was not performing their obligations under the lease and law so could not be pursued.”
No, that is incorrect. The point is the incoming buyer does not “buy the arrears”. Whatever the reason for them not being collected, arrears prior to the assignment are the outgoing tenant’s liability and cannot be recovered from the incoming tenant. Grumpy Doug correctly points to s23(1) Landlord and Tenant (Covenants) Act 1995.

A debt may not have existed by June 2021 but when the managing agent finalised the Actual accounts in Sept21 there was a £400 shortfall vs Budget for 2020/21. If there had been a credit i.e. actual was £400 less than the Budget, you would have received the £400 not the previous leaseholder.

Ian Narbeth

The arrears attach to the lease, but the seller has no obligation to reveal gr and sc arrears so if the conveyancer does not make appropriate enquiries then the arrears end up needing to be paid by new purchaser to avoid forfeiture proceedings.

Audited sc accounts and sc demands may reveal sc and gr not properly demanded in accordance with the lease and law and reveal the landlord not performing their obligations under the lease and duties in law is a defence against forfeiture.

If a buyer is in position of inheriting sc arrears or enforcement action and conveyancer did not make appropriate enquiries may be grounds for potential negligence

Laura Delow
Overpayment of £400 service charge per leaseholder would bring issues re budgeting by the Landlord/management co.
It depends what the lease states will happen to properly apportioned over payment of service charges.
Some leases require overpayments to be transferred to the Reserve Fund.

Reply to the comment left by Kizzie at https://www.property118.com/am-i-liable-for-previous-leaseholders-debt/comment-page-3/#comment-197739"

; rel=”ugc”>11/10/2025″ rel=”ugc”>11/10/2025" rel="ugc">https://www.property118.com/am-i-liable-for-previous-leaseholders-debt/comment-page-3/#comment-197739">11/10/2025https://www.property118.com/am-i-liable-for-previous-leaseholders-debt/comment-page-3/#comment-197739“>11/10/2025Central Estates (Belgravia) v Woolgar (No. 2) [1972] 1 W.L.R. 1048, 1054,
per Buckley L.J.
Rent arrears are a “once and for all breach” and so if the landlord acknowledges the continued existence of the lease and communicates that to the tenant the breach is waived.

Ian
I was quoting verbatim from property law firm website.

AI overview “New purchasers of lease inherits sc arrears and Central Estates…”

Landlord can take legal action against previous owners to recover debt and forfeit the lease for non payment even after property sold which means new owner loses the property if arrears not resolved.

Reply to the comment left by Kizzie at 14:24

AI answers should not be taken at face value. I have explained how the law works. For a “new” tenancy (i.e. one granted post 1995) the landlord can sue the previous owner but not the assignee for arrears. The landlord can seek to forfeit the lease for non-payment of rent or service charge by the previous owner but not if he has waived the right to forfeit.
Martin, who posted the question, said it related to service charges of around £400, for the year to March 2021. In the 5 years since then it is almost certain Martin’s landlord has accepted ground rent and other service charges and/or done other things affirming the continuation of the tenancy. That means the right to forfeit for non-payment of the March 2021 arrears has been waived.
Your search enquiries and AI answers overlook these points entirely

AI answers the specific question put to it.

It doesn’t speculate.

Reply to the comment left by Kizzie at 16:59

AI is designed to answer specific questions based on its training data and algorithms, but it does not speculate because it lacks consciousness, beliefs, or the ability to “know” in the human sense. Instead of speculating, AI generates responses by predicting the most likely sequence of words based on patterns in its data. However, this can sometimes result in “hallucinations,” where the AI provides incorrect or made-up information that sounds plausible.