Outgoings such as water or rent should be settled before completion. But in instances when this is not done, outgoings on the land can be split between the parties to the contract. This article discusses about the process undertaken to assess the total outstanding amount and paying them.
The sum total of the apportioned money should be shown on the completion statement. While council tax and water charges are apportioned they are usually requested to be sent to the seller and the buyer after completion of transaction takes place.
Apportionments are dealt with in Standard Conditions 6.3. These conditions allow a provisional apportionment to be made when the exact amount is not known at the time of completion. The seller’s conveyancing solicitor must request for the receipts to make a final calculation of the amount required and also arrange for a copy of this to be sent to the buyer to help him verify that the final calculated amount is indeed correct.
Standard Commercial Property Condition 8.3 deals with detailed provisions regarding apportionments when the property is being sold subject to a lease. Under residential transactions, as per the Standard Conditions the seller is understood to own the property for the entire day of completion .But under commercial standard conditions, the buyer is understood to have owned the property for the entire day of completion.
Photo courtesy: Bert Kaufmann