Management fees - selling property

MetHerInSolas

Status: Gone "Sale Agreed" on my property, my solicitor is organising contracts.

I have just received my Mgt fees for the forthcoming year Oct 2015 -> Oct 2016 but all going to plan I will be out of my property by November 2015.

What is the situation legally i.e. could I pay until Xmas or do I have to pay the whole amount?

athtrasna

MetHerInSolas wrote: »

Status: Gone "Sale Agreed" on my property, my solicitor is organising contracts.

I have just received my Mgt fees for the forthcoming year Oct 2015 -> Oct 2016 but all going to plan I will be out of my property by November 2015.

What is the situation legally i.e. could I pay until Xmas or do I have to pay the whole amount?

Usually you would pay the full year but recoup the overpayment from the purchaser. If your fees are not paid up the management company can refuse to release the paperwork necessary for the sale to complete.

seamus

Your solicitor will go to the management company to request a pile of documentation from them. Beware, there are scrivenery fees for this that you will have to pay. Yet another fee that nobody mentions until it needs to be paid yesterday

But the management company will usually insist that someone is paid up on their management fees before they do this. Assuming you make the request in September, they may just go ahead. But with a sale date in November, they may insist that you pay your fees for the upcoming year before they'll process the documentation.

Legally they have you over a barrel. They can just not process the documents and then your sale will fall through. However, the good news is that your purchaser will refund the balance of the management fees for the year. I.e. the full fee minus October & November.

heylin

Are you absolutely certain your management company will require the full years fees in advance? I know of a number of management companies who accept fees being paid on a monthly basis. If you have a close date for the transaction, you should just be able to pay management fees up to that date and let the purchaser pay for a partial year. Your solicitor should be able to sort this out for you.

When I purchased a property recently, I paid a partial years fees for the first year because financial year started before transaction closed. The vendor would have had to only pay for the time prior to closing date.

seamus

In the place I just sold, the management company allowed people to pay on a monthly basis alright, but when it came to selling they insisted that the year's fees were covered upfront.

In your case it's likely that your vendor paid the full fees and you paid the vendor for the rest of the year rather than the management company.

The management company has no interest in getting half of the year from one party and chasing the new owners for the rest. But I imagine some smaller mgmt co's will do it.

heylin

seamus wrote: »

In your case it's likely that your vendor paid the full fees and you paid the vendor for the rest of the year rather than the management company.

The management company has no interest in getting half of the year from one party and chasing the new owners for the rest. But I imagine some smaller mgmt co's will do it.

I meant to mention in my post that when I paid a partial years fees for the first year, I paid the management company directly (not the vendor). This is why I am saying the vendor must have been allowed to only pay up to the closing date.

P. Breathnach

Management companies can very a bit in their practices, but it's not really an issue.

The solicitors for purchaser and vendor sort things out in the course of finalising the contract, and the fee is apportioned on a time basis. So if you pay the full year's fee, part of it (most, in your case) will be added to the final figure to be paid by the purchaser.