Practice

Position on sale or transfer.

There is the prospect that a unit could be transferred to a buyer when out standings remain unpaid. It must be quoted again subsection (i) of section 9 (1) because it’s connection with the first a second paragraph of section 21 (4).

The connection has to be construed in these terms:

1. It is clearly stated that in some cases buyer and seller are jointly and severally liable for service charge debts despite the fact that they may be or not be real debtors.

2. Under last paragraph of section 9 (1) (i) the rule above mentioned breaks up when ‘any of the governing bodies specified in section 13 have been aware of the change of ownership of the house or premises, by any other means or as a results of conclusive actions of the new proprietor or when the transfer is well-known’, therefore, the transferor would not be not liable in any way after the transfer, but is, naturally, still liable in relation to debts incurred before the transfer.

3. The buyer and seller whether or not they have registered their titles at Land Registry could be liable for these debts.

4. From the position of the commonhold it is always better to take the registered proprietor to court in such a way that the property could be seized by court order through a writ of attachment lodged in the Land Registry

Even though in principle, the law prescribes that only the real debtor is answerable, that does not mean that the other party could become responsible to the commonhold either. The act penalizes certain conducts of the non-real debtor.

New owner liable for debts which should have been paid by the seller

Section 9 (1) (e) provides that ‘Any person acquiring a house or premises with commonhold land, even when the title is entered in the Land Registry, shall be liable, with the acquired property as guarantee of any outstanding amounts payable owed by previous owners. This liability includes general expenses up to the limit of the fees assessed for the period to date of the year when the transfer of ownership took place and for the immediately precedent three years. The flat or premises shall be legally encumbered for the fulfilment of this obligation.’

Seller liable for debts after the sale

As it is specified in the second paragraph of section 9 (1) (i) the seller must ‘notify the person acting as secretary of the commonhold, by any means providing certification of delivery, the change of ownership of their flat or premises. Any owner failing to comply with this duty shall remain liable to the commonhold jointly with the new owner for fees incurred after the transfer, but shall be able to claim refund from the new owner.’

In both cases sellers and buyers may bring a claim for repayment between them. CA ruling in Málaga 26-09-2006