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When acting for a vendor of a property in a managed development, a solicitor needs information from the management company to reply to the relevant requisitions on title. If there are outstanding service charges, a management company or its managing agent often seeks a solicitor’s undertaking regarding the arrears prior to providing the replies.

The basis of this stance by a management company is that the title deeds often make provision of services dependent on payment of service charges. Particularly in a circumstance where there are substantial arrears, a sale is often the only opportunity for a management company to collect moneys due to it, and so, while facilitating a sale, it will require an assurance that the arrears will be paid.

As always, when faced with a request for an undertaking, a solicitor should always, in the first instance, request their client to discharge the arrears due. An undertaking should only be furnished if there is a good reason why the client cannot discharge the arrears.

A solicitor is under no obligation to give any undertaking, and a client cannot instruct a solicitor to give an undertaking. If the client is not in a position to pay the arrears before closing, and if the solicitor is willing to consider giving an undertaking and is satisfied that there will be sufficient funds available, then the following should be noted: 

• Any undertaking should make reference to a specific amount and should be qualified by the proviso that the particular sale closes within a specified time limit and the proceeds come into the hands of the solicitor, 
• A solicitor’s undertaking is binding even if it does not include the word undertaking, 
• An undertaking should indicate when it will be complied with – if there is no express provision, it is implied that the undertaking will be performed within a reasonable time, and
• The client’s authority and indemnity should be obtained in writing. 

In a situation where a vendor client is not in a position to discharge service-charge arrears prior to the sale closing, then the purchaser’s solicitor will ordinarily request an undertaking from the vendor’s solicitor regarding payment of the arrears. The same considerations apply to such an undertaking, and the undertaking to the purchaser/purchaser’s solicitor should be consistent with any undertaking provided to the management company.

In circumstances where the vendor is a mortgagee or receiver, these undertakings may be offered by the vendor, and it is matter of contract between the parties as to whether or not to accept such an undertaking.

The committee is also aware of requests from management companies for undertakings from vendors’ solicitors to provide contact details for the purchaser, and a refusal to provide information in the absence of such an undertaking. It is the view of the committee that there is no basis for this position. A vendor’s solicitor is generally not in a position to undertake to provide such information about a third party, and such an undertaking should not be sought. of the Multi-Unit Developments Act 2011 creates an obligation on the ‘unit owner’ to provide certain details, such as his or her name, his or her address, the names of the tenants in the unit, particulars of any habitual occupiers of the unit other than tenants, and such other contact particulars as the owners’ management company may reasonably request. The management company is, of course, entitled to this information about the new owner, and the requisitions require a letter addressed to the management company to be provided on closing, advising it of the change in ownership. The relevant details can be provided in this letter with the agreement of the purchaser.