I moved in during the financial year. How are the service charges shared between me and the previous owner?

When you buy a property, your legal representative and the seller’s legal representative are responsible for agreeing, as part of the sale, how the service charge is shared between you and the previous owner. This includes any service charges credits or invoices for periods before you owned the property – even if those charges come in after you’ve moved in. This is often known as a retention fee. 

As we’re not involved in the sale process, we’re unable to assist with service charge queries for the period before your ownership began. A few helpful points to keep in mind:

• We can only issue service charge invoices once we’ve received formal notice of the change in ownership, so sometimes there may be a short delay before your first bill arrives. The period shown on your first invoice may be longer than your actual ownership but you should only be charged for the portion that applies to your time as the owner, as agreed between your legal representative and the seller’s legal representative. 

• A formal change of notice is issued by your legal representative. If this hasn’t happened, please prompt them to do so. 

• After the annual accounts are completed, you may receive an invoice for a service charge deficit or a credit note for a service charge surplus from the previous year – even if you didn’t own the property at that time. If there is a deficit, as the current legal owner, you’ll be responsible for this payment. However, your legal representative may have arranged a retention fee during the purchase to cover such costs. We recommend contacting them to check whether this was done, and to understand the process if there is a surplus on the account related to service charge payments made before the purchase.