On the completion of a sale of a Leasehold Property it will be necessary to apportion sums payable under the Lease (Service Charge, Grount Rent, Insurance Premium) between seller and buyer so that they are each responsible to the charges which relate to their period of ownership.
Service Charges are very often collected on the basis of an estimate of annual Service Charge at the beginning of each financial year. At the end of the financial year accounts are prepared which will show whether or not the amounts collected from leaseholders is sufficient.
Very often, the amounts collected will not be sufficient which will mean that a further payment must be collected from the leaseholders.
At the time of completion of your sale it may not be possible to determine what if any excess will be payable at the end of the financial year. The buyers solicitors will therefore ask that a Retention is made to be held by solicitor spending the year end accounts being finalised.
Once those accounts have been finalised, if an excess is due which relates to your period of ownership the amount payable will be paid from the Retention amount held on completion.
If there is no excess due, the Retention will be released to you although bear in mind that this may be some months after completion.