Q&As

On a sale of a residential flat where a reserve fund contribution is paid on account by the seller, can the seller require the reserve fund contribution to be apportioned between the seller and the buyer with the apportioned part to be reimbursed to the seller by the buyer at completion?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 10/05/2019

The following Property Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • On a sale of a residential flat where a reserve fund contribution is paid on account by the seller, can the seller require the reserve fund contribution to be apportioned between the seller and the buyer with the apportioned part to be reimbursed to the seller by the buyer at completion?

On a sale of a residential flat where a reserve fund contribution is paid on account by the seller, can the seller require the reserve fund contribution to be apportioned between the seller and the buyer with the apportioned part to be reimbursed to the seller by the buyer at completion?

It is commonly the case on the sale of a leasehold property that ground rent, service charges and any contributions to a reserve fund are payable in advance on a date set by the lease. Unless the sale of the leasehold property coincides with a service charge or reserve fund period, this means that the seller will have made a contribution in excess of their period of ownership of the property. Additionally, where variable service charges or reserve fund contributions are made based on estimates, with an adjustment after actual spend has been incurred, it may not be until some time after payment is made that the true liability is known, with a rebate or an offset (or an additional liability) after recalculation.

It is often important to ensure that apportionment does take place, as where contributions are in advance, the

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