Ground Rent

[jimboyF4PZ]

My wife owns a second property, and recently recieved a notice from the Freehold managers demanding payment of £100 ground rent and £146.88 in "Administration Expenses" i have tried unsucessfully (so far ) to extract a breakdown of the costs that have been applied to the account.

There had been no previous correspondance from this firm although they have since informed me that the ground rent was due on 31st March 2005, the letter which also contained a "copy" of the original invoice. The "Copy" of the original invoice was dated the day before the letter demanding the total of £246.88.

I pointed this out to the company involved and they now say that it was a reprint and not a copy.

Can i ask for a breakdown of charges under the Data Protection Act in this instance ?

[comanche]

Do you have a copy of the lease? If so what does it say about the ground rent?

[jimboyF4PZ]

unfortunately not, can i request one with the Data Protection Act letter ?

[comanche]

I don't think it would be covered by the Data Protection Act. Did your wife use a solicitor when she purchased the lease? If so, they may be able to provide a copy.

The amount of the ground rent would be set out in the lease and doesn't seem outrageous. Under the lease it may be possible for the management company to levy an administration fee but the amount being claimed seems excessive to say the least. Unfortunately without knowing what's in the lease, it's quite difficult to advise.

[bankoff]

If this property is a flat then, there will be ground rent, unless the owners own the Freehold between them.

As for the other charge. This is not unreasonable, it is for the upkeep of the common parts, ie communal gardens, parking areas, communal lighting, and of course Building Insurance, which can be quite expensive.

If there is a managing agent they are entitled to add up to 15% of everything that they spend on the upkeep of the property.

Also if you have just recently purchased this property, then you cannot be charged for ground rent or service charges that are for last year if someone else owned the property.

Your solicitor should have asked about the management of the Freehold when you purchased the property, and you should have had a copy of the lease.

Hope this helps

[comanche]

I disagree on a couple of points.

"Administration Expenses" could be anything. Taken at face value it seems to be a charge for administering the ground rents process. Normally leases will be quite specific about what is being charged for and good practice dictates that a service charge bill will be sufficiently detailed to enable the leaseholder to check that the costs fall within the definitions included in the lease. Indeed the ODPM has just finished consulting on a minimum standard for service charge invoices. If these expenses are indeed for services, then the leaseholder has a statutory right to inspect the accounting records and I would suggest that they do so in this case.

The 15% administration expenses is a common misconception. Again this is determined by what's in the lease. They will sometimes specify a fixed percentage. Others say that the charge should be based on actual costs. 15% is likely to be the maximum amount chargeable in such cases but quite often these charges have been reduced by Leasehold Valualtion Tribunals to much lower levels.

[gothicf0rm]

ground rent can be the money for rent of the land... we get ground rent and we do not include other things in the ground rent like maintenance which is extra. i suppose we could call those "administrative fees." if you have lots of properties its actually cheaper to call maintenance that rather than detail it individually, would you rather have a full invoice with everything detailed that costs £10 because someone had to work out 15% of painting the outside to meet conservation area standards, 15% of a new lightbulb, 15% of tree pruning?

[jimboyF4PZ]

The "Admin fees" are due to the unpaid rent, they are nothing to do with the maintenance costs which are paid to a seperate entity, When i wrote to them asking them how "admin Expenses" OF £146.88 could be incurred within 2 days of the issue of the invoice, i sent them a cheque for £100 for the ground rent in full and final settlement of the account as i did not think that their charges were reasonable.

They wrote back returning the cheque and threatened to inform the mortgage company that we had not paid the ground rent, and that they were going to approach them (the mortgage co) for payment.

I wrote again requesting a breakdown of how such charges could be accrued in 2days from the issue of the original invoice.

They wrote back with a list of the charges that they charged for things for example

A breakdown of "Administration Expenses" would cost me £17.82

A copy of the lease would cost me £x

Etc etc.

I have since written back confirming that we have no intention of paying any unsubstantiated "Admin Expenses" and that i had informed the mortgage provider of the situation and that i had offered to pay the Ground Rent but refused to pay such ridiculous charges.

Will the Data Protection Act letter get me the breakdown of charges ?

[comanche]

You could try but I'm not sure that you would get that sort of information with a Data Protection Act enquiry.

Is there no chance that you get a copy of the lease from your solicitors?

[bankoff]

Try the following website:

http://www.leaseholdadvisoryservice.co.uk/

You are entitled to a breakdown of Service Charges, which should show all expenditure on your behalf, plus the Management Fees. This should not be charged for if you are a Leaseholder.

And the maximum that can be charged for managing is 15% on top of the amount of expenditure.

The ground rent should be billed for separately. And they have to give you 30 days in which to pay.

If they send the bill out late then you still have 30 days in which to pay.

If you are unhappy with the amount of service charges levied you can go to a tribunal.

Hope this helps.

[jimboyF4PZ]

I still cant see how the Data Protection Act letter will not make them give me a breakdown of charges to my account, They are charges to MY account only these are not for any maintenance, just charges due to "non payment of Ground Rent"

[bankoff]

I cannot see how they have arrived at this amount on top of the ground rent, unless they have gone to court and its court fees and interest.

If they will not give you a breakdown of these Administration charges, then tell them you will take them to a Leasehold Valuation Tribunal. That might flush them out.

There is a lot of information about how to deal with this and about your rights on the link below:

http://www.odpm.gov.uk/search/esearc...nk&summary=yes

[vigilant]

My landlord is demanding, through yet another managing agent, payment for "outstanding" service charges and management fees, which he claims are 7 years old. Is there a legal limit to how far back demands can be made? We have a troublesome history with the freeholder and this seems to be another example of his underhand methods.

[bankoff]

If you have a copy of your Lease, it should contain the sum of the Ground Rent, and any increase that may be written into the Lease. This is the rent that you pay to the Freeholder for the ground on which the property stands. Most ground rents are paid twice yearly on Lady days, and if the Lease is fairly new it may contain increases set up every 25 years. The average ground rent is about £100 per year, but there are a lot of old leases still running from 90+ years ago that may only be about £10 per year.

If all the residents jointly own the Freehold then the Ground Rent is usually waived, as if you own it together you have no real need to pay it.

However, if it is Service Charges, then it is different. Service charges are made up of Insurance of the buildings, cost of keeping communal areas clean, cost of gardening and cost of Electricity to light the communal areas.

Its quite straightforward if it is managed properly by the residents themselves. You all pay the same for the management of the upkeep of the common parts and the building insurance.

You are entitled to have a copy of the Management Accounts every year and there should be an Annual General Meeting to discuss any increases in charges etc.

[vigilant]

Thanks for message re ground rent - my problem relates to an OLD demand - i.e. one the freeholder 'discovered' has not been paid through an old, unreliable managing agent. This is 7 years olf - alledgedly. Can they make demands that far back ?

[bufo]

These Landlords Sound Very Familiar Not Mr Stapleton Is It? Please Look At My Question On Here And See If You Can Help At All Thankyou

[acrab]

There is an angle under the Data Protection Act 1998 that could address this issue. Under the Act, any person in control of information which relates to an individual, such details about service charges, is under a statory duty to ensure the information is 'accurate'. If it is not, then it is unfair processing under the Act and an indivudla can apply to a court for the information to be corrected. The person controlling the information, such as a freeholder, must show how the information is fair. Compensation can also be claimed for stress caused by the inaccuracy.