# Annual Management Fees - Arrears of Previous Owner



## Lauren (25 Apr 2006)

Just received my annual maintenance charges from apartment management company. Included in my charges are the arrears of the previous owner. 
I asked the administrator why these charges were on my bill given I only moved in at the end of Jan and these arrears are from 2005. She vaguely indicated that I had a liability since my solicitor should not have allowed me to close if there were arrears on the service charges. What are my rights here? How should I proceed?


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## Howitzer (25 Apr 2006)

My opinion would be that it's the same as a utility bill, that the previous owner is liable and that the management company would need to pursue the previous owner for any outstanding debts.


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## efm (25 Apr 2006)

Don't know if I agree with Howitzer on this one - I think that management company charges are payable by the apartment unit, regardless of who owns it - ie the debt cannot be discharged on change of ownership.  I think the admin may be correct when she says that your solicitor shouldn't have let you close - the solicitor should at least have checked as part of establishing title and that the property was free of encumbrances (I think that is the correct term!!)


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## biggerry (25 Apr 2006)

efm is right.  I had a similar issue when I bought an apartment.  In the apartment that I bought, the mgt fees are paid every 6 months i.e. Jan to June and July to December.  

I signed for my apartment in September and got my "first" notice of management fees the following January which showed over €900 owing from the previous July to December period.  I offered to pay for 4 months (i.e. September to December) so I paid this along with the Jan to June amount.  I kept getting reminders about the outstanding amount, so I contacted my solicitor (the solicitor I used when buying the apartment wasn't practising any more, so I got a new one). The "new" solicitor said that before I signed for the apartment that my previous solicitor should have checked that all outstanding bills were paid, so he advised that I just pay the money.  

Unfortunately Lauren, you'll have to pay


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## Lauren (25 Apr 2006)

Hmmm just spoke with my solicitor who differs in opinion...She is chasing down the other party...has said they are liable...We'll see...Surely it is part of the solicitors work to determine if there is any money owing prior to closeure?


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## Seagull (25 Apr 2006)

If the debt for the arrears goes along with the residence rather than the seller, then I would suggest you ask the solicitor to pay it. They're supposed to have done the due diligence to check that there are no outstanding payments due.


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## mf1 (25 Apr 2006)

The solicitor asks the question. Usually gets a reply and usually gets a receipt for all arrears of management fees. The vendor may tell porkies to his solicitor who in good faith passes them on to purchasers solicitor. The Management Company may not be well run. The Purchaser may have wanted to close even though not all the information was available at the time. It is primarily the previous owners liablity but in some circumstances the new purchaser may unwittingly take on the liability. Not everything is black and white. Solicitors are not responsible for everything that goes wrong. 

mf


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## elgin (26 Apr 2006)

Will the new solicitor's fees be more than the service fee's owed?
Was in the same position myself, paid the service fee as it was only a couple of hundred euros rather than chase down the previous owner.


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## Lauren (26 Apr 2006)

What new solicitor? Its the same solicitor who dealt with the sale.


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## Lauren (28 Apr 2006)

My solicitor has said that she has an undertaking and the solicitors will have to comply with it. 
Is an undertaking enough to ensure that I am not liable here?


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## ClubMan (28 Apr 2006)

Thats is a strange case. At our last _AGM _we were advised by the management agent that properties in the development could not be sold until such time as any outstanding management fee liabilities had been discharged and the vendor's solicitor would be obliged to attend to this and the buyer's solicitor should apprise the buyer about any relevant facts. I'm not sure that _mf1's _"porkies" theory holds since the management agreement/lease should part of the legal documentation attached to the property so surely the onus is on the vendor's solicitor to make sure that all legal obligations have been discharged in this and other respects? As such I don't understand how your vendor managed to sell with outstanding liabilities. Unless different management company agreements/leases have different stipulations in this context? Also - as it happens there were a couple of new residents at our meeting who were never told by their solicitor that the development was privately managed and that there were fees attached to this. I'm not sure if they were even presented with the management company lease to sign. Also - our managment agreement/lease legally binds people to doing/not doing other stuff like not erecting satellite dishes, not installing fittings out of keeping with the design of the estate (e.g. replacing wooden windows/doors with _PVC_) etc. but some people just ignore these rules do their own thing. The management company/agent say that they will pursue these issues but I can't honestly see them enforcing some of these and having people undo major work (e.g. installation of _PVC _windows/doors) that have already been done...


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## MOB (28 Apr 2006)

From the information posted, it seems to me that the situation is as  follows:

1.  Lauren has a legal liability to pay the charges.

2.  Lauren's solicitor acted properly in obtaining an undertaking from the Vendor's solicitor to discharge the arrears of charge up to date of purchase.  This can often arise where, for example, the bill for the charges is not yet available.  If solicitors simply refused to complete purchases over issues such as this, commerce would grind to a halt.

3.  Lauren has a comeback against the vendor's solicitor if he doesn't comply with his undertaking.  He in turn has a comeback against his client (the seller), for whom he gave the undertaking.

4. Independently of the above, Lauren has a comeback against the seller under the terms of her purchase contract, but there is no need to enforce this contract, because a solicitor's undertaking is more readily enforceable.

5.  Lauren's solicitor may well be entitled to charge extra for his time if he has to enforce the undertaking.  The usual fee charged for a conveyance is predicated on the assumption that the contract will be honoured and undertakings complied with.  Enforcement of a contract or undertaking is extra work.  If the sum involved is small, Lauren might well decide to just take it on the chin.

6.  Lauren can probably postpone paying the arrears if she explains to the management company that she is pursuing the previous owner for them, and that payment is secured by a solicitors undertaking.


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## Lauren (28 Apr 2006)

Thanks MOB. So the undertaking carries some weight then?


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## biggerry (2 May 2006)

Hi Lauren,

Just wondering how you're getting on with this? Did you get the money from the previous owner?


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## Lauren (3 May 2006)

My solicitor has written to his. The management company are backing off pending a resolution through this means.


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