@Boronia said:
My understanding is that in NSW, at least, usually any outstanding or pre-paid service fees are pro-rataed between the buyer and seller at the time of settlement. Any outstanding levies would be deducted from the sale price, and paid to the SC (or other service provider) or the buyer; levies pre-paid beyond the settlement date would be credited to the buyer.
Yes. That is how it should be done. However, the obligations associated with the unit are inherited by the new owner and it is up to the new owner to try to recover costs from the old owner if something went wrong.
When we bought our unit, something did go wrong. The previous owner owed several thousand dollars in both unpaid levies and ACT govt. rates. The correct amounts had been deducted by our conveyancing lawyer from the sale price. The balance had been paid to the previous owner. Title had been transferred to us. The deducted amounts were sitting in the lawyer’s trust account and cheques to pay those amounts to the ACT govt. and our OC were made out and attached to the file with a paperclip. Then, just before the cheques would have been mailed, the ACT law society froze the lawyers trust account while it resolved some alleged poor practice by our lawyer. It had nothing to do with our mundane matter and I don’t know what the outcome for our lawyer was.
What it did mean was that we were responsible for several thousand dollars of debt associated with the unit and facing demands for payments. We were unequivocally responsible to pay and all we could do was plead for leniency and patience since we could not raise that sort of money at the time. After some months, the ACT law society had done what ever it had to do and the money was released and the payments were made. We had been worried for a while there!