Selling a Flat With Service Charge Arrears

Falling behind in your service charge arrears will not prevent you from selling your leasehold flat, but can create extra complications.

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Your top questions when selling a flat with service charge arrears

✅ What are service charges?

If you are the owner of a leasehold flat, you will have signed a lease agreement with the freeholder, and it will specify how many you are the owner of the flat, how much ground rent you will pay each year, and the service charge – the latter is a fee that the freeholder charges to pay for a host of services at the property, including rubbish collection and building maintenance.

✅ What are service charge arrears?

As the leaseholder of your flat, you will be required to pay your regular service charge in the amount specified in the lease agreement that you signed with the freeholder. If you fall behind in making these payments because you are experiencing financial difficulties, or for any other reason, then you will be deemed in arrears for the outstanding amount that you owe.

✅ If I sell my flat, do I still owe my service charge arrears?

Yes, when you sell a leasehold flat, the legal duty to pay the remaining amount of service charge arrears stays with you and it does not transfer to the next leasehold owner of your flat. It’s important that you try to clear the outstanding service charge amount that you owe the freeholder, because they could sue you in an attempt to collect the money.

✅ What are my options for resolving service charge arrears?

You could pay off the arrears before selling your leasehold flat if you have the funds to do so, and it will not create problems in trying to buy your next home. Or you could reach an agreement with the freeholder under which you would use a portion of the proceeds from the sale of your property to clear whatever amount you currently owe them.

✅ Will service charge arrears block me from selling my flat?

No, your freeholder will not have the legal power to prevent you from trying to sell your leasehold flat just because you currently have service charge arrears. But very high service charges can be one reason people build up arrears, and some buyers might quickly lose interest in making an offer on your flat if they think that the service charge is too high.

✅ What is the speediest method to sell a flat with service charge arrears?

Often the fastest option is likely selling to LDN Properties or another quick property buying company, as they generally take just a handful of weeks to exchange contracts and pay the seller the full proceeds. You can expect to wait many months at least when trying to sell a leasehold flat through an estate agent, at a property auction or without any third party assistance.

✅ Can I avoid paying commission when selling my leasehold flat?

Yes, if you decide to sell without any help or if you sell your home to a legitimate no-fee quick property buying company such as LDN Properties. But if you decide to use an estate agent or an auctioneer to sell your leasehold flat with service charge arrears, they will charge you commission and this will be deducted from the eventual property sale proceeds.

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