Management company asking for 3 years advance service charge to allow the purchase?

Management company asking for 3 years advance service charge to allow the purchase?

by Readers Question

Guest Author

0:16 AM, 19th January 2024, About 5 months ago 2

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Hello everyone, A friend of mine buying a flat and he is also a non-Uk national.

The Management company of the block he is buying the flat in is asking for 3 years advance service charge on top of the regular service payments to permit the purchase.

Is it normal practice on leasehold flats for non-UK nationals?

It’s in the Chelsea area and three years service charge is a large amount.

They say they will return it after three years if the regular service charge payments are made on time.

If anyone has any experience of this I would be very grateful.

Vardan


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Comments

Ofer Moses

11:08 AM, 19th January 2024, About 5 months ago

Hi, In regards to non uk residents purchasing a property, I would consult a lawyer, however, as far as I am aware, the only concern a management company has when a property is beimg sold, is that the seller has paid the service charge up to date of sale and will "advise" on a retention from the purchaser to cover any additional service charges relating to the service charges in arrears,
Nevertheless, retentions are matters between the vendor and purchaser to agree upon, not, as far as I am aware, the block management company.

Mervin SX

9:20 AM, 20th January 2024, About 5 months ago

Vardan,

It may be that the request for advance payment has come from the management company, but it is very likely to have been raised by the freeholder.

The lease may have a clause where by the freeholder is required to give permission to sell (or assign) the lease to a new leaseholder. As part of this permission (sometimes called the license to assign), the freeholder can impose conditions if the deem the new leaseholder is not capable or may not be able to adhere to the conditions of the lease.

If I was a freeholder and the lease allowed me to withhold permission to assign (permission to sell), theny concern of not being able to collect Service Charge from a foreign resident leaseholder is fair and reasonable.

Please speak to your solicitor to understand the background of reason for this advance payment request.

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