New Building owner billed us for deduction which previous building owner gave us

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New Building owner billed us for deduction which previous building owner gave us

The property is purchased in July 2016 and a half year later in Jan 2017, the new owner billed us for the monthly reduction we received from the previous owner from June 2015- June 2016. They are saying there wasn’t official notice to explain the deduction, therefore, it was a mistake and counted as the account receivable. For us, we have received deduction without explanation when the economy wasn’t doing in general from the previous ownership. And it was refunded every month for several months despite the payments we made, do we presumed it was the deduction. We requested for the proof that it was listed as the account receivable on the closing of the purchase of the property but

have not heard from them for few months. Is this legal to charge us back dated amount?

Asked on August 17, 2017 under Business Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The prior owner had the right to give you a deduction, reduction, credit, abatement--however you want to style it--and if he or she did, the new owner cannot now charge you for it: if the old owner let you pay less in some fashion, that was the agreed-upon amount to pay at the time; it cannot be retroactively increased. The new owner does not have to keep giving you and deduction, etc. unless such is in a still-in-effect written lease or other contract, but they cannot change what was done in the past.
On the other hand, if there was simply some accounting or administrative error that resulted in the return of money to you, then the new owner could get it: he is entitled to what the old owner was entitled to get (but no more; that's why if the old owner intentionally gave you a break on what you owed, the new owner cannot go back on that) and can try to recover a mistaken deduction the same way the old owner could have.
So the quesition is: was this deliberate or not? You write that you "presumed" you were getting  deduction on purpose, but "presuming" means you don't know--you assumed. Call the prior owner: find out if 1) it was intentional/deliberate and 2) if so, will he write/sign something to that effect? If he deliberately gave you a break and will, at need, back that up (i.e. if you are sued by the new owner for the money, you could get the old owner to testify in court, either voluntarily or by subpoena if necessary), you'd be in a good position to refuse to pay this back amount (though again, the new owner does not have to continue this deduction into the future, unless there is a written agreement to do so) and could defend the matter confidently in court if sued.
But if the old owner equivocates or refuses to say he gave you this on purpose, if you were sued for the money on the grounds you owed it and there was only some error made previously in your favor, there is a good chance that you would lose since you won't have evidence supporting your position. Therefore, you may wish to agree to pay, especially if you can negotiate good payment terms.


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