4.11.3 What should I do when the ownership of a flat changes?

4.11.3 What should I do when the ownership of a flat changes?

Accessed via The Block -> Block Summary -> [Details]


You should record the change of ownership using the Change of ownership function in the Unit Details screen.
You should NOT edit and change the name of the owner as this will lose all historic information relating to that unit which will not be viewable on the Workbench -> Reporting -> Leaseholder Statement. If you entered the wrong date during the change of ownership then DO NOT click on the change of ownership to change the date again as that can create an extra record which will be incorrect. 


Treatment of Financial information on a Change of Ownership
When a unit is sold and a property transfers to a new owner, the original owner will, ideally, ensure that all service charges, ground rents and any other charges are settled prior to that transfer of ownership.
However, sometimes there is a balance to pay.
By default, when a unit is sold and the ownership transfers from one owner to another, Blocks Online will automatically transfer any outstanding balance(s) from the original owner's account to the new owner's account i.e. any debt belongs to the unit, and not its specific owner.
When a Leaseholder Statement is produced for the old owner, it will show a Closing Balance figure: The Leaseholder Statement for the new owner will show the same figure as an Opening Balance.

Clearing a balance outstanding before a Change of Ownership
If you do not want the balance to automatically transfer then the following steps should be taken,  before  a change of ownership is recorded:
1) Create a Credit Note (service charge, ground rent, administration charged, etc) for any balance outstanding that you wish to remove from the old owner's account. This Credit Note can be sent to the original leaseholder, along with a statement if required, to show the closure of the owner's account.
2) Record the change of ownership from the old owner to the new owner.
3) Raise a Demand (service charge, ground rent, administration charge) for the balance that was owed by the previous owner and is now to be settled by the new owner.

Recording the receipt of funds
When funds are received to settle the balance that is owing, they would be recorded against the unit. If they were paid by the new owner, then no specific action needs to be taken.
If, however, the balance outstanding is paid by the unit's old owner, then it can be helpful to record a comment with the receipt to indicate that the funds have been received from a previous owner (for example, "Receipt of funds from previous owner in relation to balance outstanding").
Note: In this scenario, the Leaseholder Statement for the old owner will continue to show a Closing Balance figure. The Leaseholder Statement for the new owner will show the  same figure as an Opening Balance, but it will also show the receipt of funds, ideally resulting in a net £0 balance.
If you do not want the receipt of funds to be reported on the Leaseholder Statement for the new owner but want to see that receipt on the statement for the old owner, then you need to record the receipt date as a date when the old owner was recorded as owning the unit. In this scenario, user typically set the receipt date to the last day of ownership.  Please note, however, that be doing this the bank statement in Blocks Online will not align with the bank account and the difference will need to be recognised during the bank reconciliation process.

Generating a demand / credit note for a previous owner after a Change of Ownership
Once a Change of Ownership has been recorded, Blocks Online will generate all future demands / credit notes in the name of the new owner.
To generate a demand / credit note in the name of the old owner, then a Third-party demand should be produced. Note: This third-party demand will neither appear on the statement for the previous owner nor the new owner.

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