Aggressive Freeholder/Admin Fee - Help!

[Average_Joe]

Hello,

 

I am hoping that someone will be able to offer some advice.

 

The basic scenario is this:

 

I own a two bedroom leasehold flat.

 

In May I received a ‘Letter Before Action’ from the Freeholder. This document stated that the ground rent was in arrears, this was payable within 14 days and a ‘Letter before action’ fee of £120 was added to my account “as per the enclosed summary”.

 

Now, prior to this letter, I had received no invoices for Ground Rent from this company that complies with legislation.

 

I immediately contacted the Freeholder. The Freeholder in question had purchased the Freehold approximately 14 months previously. Prior to this, all Ground Rent was paid to the original builder of the new build property.

 

I offered to pay the ground rent arrears immediately, however refused to pay a £120 Letter before action / admin fee as I deemed unreasonable. I explained that I had received no invoices and the only previous correspondence had been over a year previously when they introduced themselves as the new freeholder.

 

I pointed out that the “enclosed summary” was incorrect, as one of two periods shown had been paid to the predecessor.

 

The matter has been going back and forth for the past 6 weeks. In this time, I have established and pointed out the following facts:

 

1.) The correspondence address that the freeholder holds for me is inaccurate. It contains Flat Number, Block of Flats Name, Road Name, Postcode. However, it neglects to include the Number of the road if that makes sense. For example, correspondence has been addressed Mr Joe, Flat 1, ABC House, ABC Road, AB1 2CD, instead of Mr Joe, Flat 1, ABC House, 46 ABC Road, AB1 2CD.

I attempted to explain that the address that they have allegedly sent post to was not exact as that on my lease and this could explain as to why invoices had not been received. There are also a number of other blocks on this road that also incorporate the name ‘house’ in their title.

 

2.) Other residents have failed to receive recent documentation allegedly sent by the freeholder.

 

In communication with the freeholder, they have stated that they have sent ‘similarly addressed’ letters. I point out that I have no ‘similar’ address, only an actual address. I point out that I received their incorrectly addressed letter by chance, as I cannot rely on the postman to get it right as its not correctly addressed.

 

I have raised numerous points with the freeholder yet they have failed to return emails.

 

I have asked simple questions such as asking for the Freeholder to confirm the clause in the lease that allows them to charge admin fees yet having asked this question 6 times, I have received no answer.

 

I have threatened with taking the matter to LVT to allow for determination as to reasonableness, however I get no response. £120 for a letter sent from an office with no Solicitor involvement is absurd.

 

I have asked for details of the complaints dept, Director etc, but they have failed to provide these.

 

The email chain has continued this week. At one point, the individual with who I have been dealing, accidently sent an email to myself that should have been sent to a colleague within their organisation, asking “Are you going to reply to Average Joe, or are you ignoring him?”

 

I have repeatedly refused to pay the £120. This week they have offered to reduce the fee to £60 if I paid within 7 days. Again, I refused, then it was changed to £60 by Fri 28th.

 

I am so frustrated, by the aggressive tactics that this freeholder is using.

 

In your experience, where do I stand and what should I do?

 

Thanks

[honeybee13]

Hello and welcome to CAG.

 

I'll move your thread to the forum that deals with freehold matters. There will be a short term redirect from this forum for you to follow.

 

My best, HB

[Average_Joe]

Thank you.

[raydetinu]

Were you informed officially of the change in freeholder? at the time.

Pay them the rent owed as full and final settlement and see what happens.

[Average_Joe]

Hello Raydetinu, I received a letter stating that they had bought the freehold, but received no invoices for ground rent subsequently. After I contacted them they sent the alleged invoices in an email which is where I noticed the address wasn't correct. The address the invoices were allegedly sent to is different to that in my lease.

[raydetinu]

Well that's their fault, they don't know the address of their own property! or was it a typo?

They blame you for that, so they have no case for any late fee.

Stick to your guns and pay only the ground rent.

is their anything in the lease about late fee payments?

[Average_Joe]

I have found nothing in the lease regarding late fee payments. I have asked the FH 7 times to point out which clause covers any fees and they have failed to answer.

I do not think a typo as they emailed two invoices to me, both of which omitted the street number. The FH refuses to back down, despite the fact I have highlighted all their errors. I have no choice but to refer the matter to LVT.

[raydetinu]

That sounds the best way of dealing with it.

Andydd may have some advice! try a pm.

[andydd]

Hiya.

 

Well.

 

Ground rent is only payable if you have received valid demands complying with S166 of Commonhold & Leasehold Reform Act 2002 > http://www.legislation.gov.uk/ukpga/2002/15/section/166 and if you havnt received them then no further admin charges are payable either.

 

So you havnt received demands, bear in mind a court/LVT wont know this so it will hear evidence from both of you and decide who is telling the truth, the fact that the FH appears to be sending stuff to the address not on the lease, talks about 'similar' addresses and there are other leaseholders who havnt received demands should all be great evidence for you.

 

As for admin charges, even IF the GR demands were sent then there has to be explicit clauses in the leases that allow the adding on of extra admin/legal costs, many old leases simply do not have such provisons, and even IF they did an LVT can decide on the level or reasonableness of such charges (at my LVT they reduced £120 to £25)...and further Admin Charges are only payable IF accompanied by the Administration Charges - Summary of Rights, see here > http://www.lease-advice.org/publications/documents/document.asp?item=14#23 (many FHs forget this).

 

Whilst not technically owing it is often best to pay any ground rent (especially if its a small amount) as it can help later on, for example if ground rent is paid and accepted then a Freeholder cant follow the forfeiture route in extreme circumstances).

 

What I would do is:-

 

Write to FH enclosing cheque for ground rent only (and write GR only on back).

 

Point out you didnt receive demands for ground rent.

 

Point out you didnt receive Admin Charges - Summary of Rights (if indeed you didnt)

 

Point out there is no clause allowing extra admin charges in lease (assuming there isnt !)

 

Go through the RICS Code here > http://www.legislation.gov.uk/uksi/2009/512/pdfs/uksiem_20090512_en_001.pdf?type=em#page=6 , all FH are 'suppossed' to comply with it, point out all the points you think they arnt complying with, there are lots about correspondence with you, answering your questions.

 

You may like to say that if they think you are wrong then they are welcome to start court/lvt action BUT you will seek to claim to claim your maximum costs, now technically speaking Ground Rent isnt in juridstction of LVT - its County Court only, BUT any extra admin charges as a result of not paying ground rent ARE juridstiction of LVT).

 

Some would say its best for leaseholder to take first step and make application to LVT first, but this means in effect you have to spend time and money proiving you dont owe something which is drastic, and from experience Ive found that LVT's are not the helpful/informal places they are suppossed to be.

 

On a final note, where you offered freehold when it was sold ?, its a criminal offence if you wre not and you can force the whole selling/auction proces to be re-run, even if at the end of the day you couldnt/dont what to/cant afford to buy it anyway.

let us know how you get on

 

Andy

[Average_Joe]

Hello andydd,

 

Thank you very much for taking the time to reply.

 

To clarify, I have not received valid demands. However, this is my word against the FH as it seems previously that other residents (there are 12 flats) received demands earlier this year.

That being said, further demands were issued in May and at least 3 residents did not receive the demand. I mentioned this to the FH, who has subsequently resent a demand to my neighbour.

 

The summary of rights regarding admin fee was sent. However, a charge for £120 for a Letter Before Action that was strewn with errors was highly unreasonable. I attempted to explain the circumstances, but the FH wouldnt listen and wouldnt accept that they had the address wrong, albeit partially.

 

I have asked time and time again for the FH to clarify the clause in the lease that relates to allowing admin fees, however, they havent answered the question.

 

The outstanding ground rent was paid in May. It was sent on the first working day after I received the initial letter and I had spoken to the FH in person. I made it very clear that I would challenge the admin fee, however, to say that communication with the freeholder has been stressful is an understatement.

 

The issue I have, is that I want to clear this charge from my account. Otherwise, if I ignore it and the FH takes no action, it will still be present when I come to sell the property.

 

I had a stern email from the Director last week saying that reducing to £60 is a fair compromise and he expected payment forthwith. Naturally, I refused. A letter was sent recorded delivery to which I wait a reply.

 

From memory, I have no recollection of being offered the freehold.

 

Any further advice greatly appreciated.

 

Thanks.

[raydetinu]

I would use that last part in Andydd's post about being offered the freehold in your discussions with them and see how they then respond?

Check with the other owners to see were offered the freehold, if you cant remember.

[andydd]

Well if you are worried about it affecting the property when selling then why not pay the £60 ? Its a small price to pay if it helps sell the property even if legally you are in the right.

 

I dont know what more to add, if you realy want to fight it then makes an application to lvt, but note since july 1st it has changed its name to 1st tier tribunal although wether its worth fighting over a small amount is questionable, you could pay it under protest and see if other fees occur later and then make an application later, in theory youvhave 12 years.

 

Its worth investigating the sale of the freehold issue.

 

Andy

[Average_Joe]

I'm not looking to sell for two or three years, it's a matter of principle so do not intend to just pay it.

 

I have asked a neighbour if he recalls being offered sale of the Freehold.

[Average_Joe]

Hello,

Having received the following email today from the FH, I'd be grateful for your thoughts:

 

We refer to your letter of 2nd July 2013.

We no longer wish to enter into protracted correspondence with yourself.

We have made our position quite clear. 3 invoices and a letter before action were all sent to the same address. Yet you aver that only the letter before action was received by yourself.

We have offered to reduce our administration charge by 50%. We are not prepared to negotiate this matter any further. If you wish to refer this matter to the LVT, then that is your prerogative. In our experience the LVT does not take too kindly to hearing applications in respect of such modest sums.

[Lea_HTH]

Now, prior to this letter, I had received no invoices for Ground Rent from this company that complies with legislation.

The above implies you received invoices, just not in the format you believe complied with the law.

 

I have asked simple questions such as asking for the Freeholder to confirm the clause in the lease that allows them to charge admin fees yet having asked this question 6 times, I have received no answer.

You can read - so either the clause is in your lease, or it's not. If it is, then pay the £60, if it's not, pay the ground rent and tell them to sue you for their alleged admin fees. Though to be fair, if they sent you three invoices (and you imply above that they did in fact send some form of invoice) and then sent you a letter before action, a charge of £60 is fairly reasonable (albeit they reduced this from the original £120).

 

To answer your latest post - the LVT won't take kindly to having to deal with the value of a dispute such as this. £60 is not a large amount to pay for four letters/invoices.

 

I don't think there is a 'principle' involved - it's just you being awkward and you must have surely spent far more time than was worth £60 on the matter. (As have I writing this response!)

 

Pay the £60 and move on.

[Average_Joe]

Lea_HTH,

 

No, no invoices at all were received.

 

The fee was £120, reduced to £60 if I paid within 48 hours that I clearly did not.

 

I can only assume that you failed to read the entire post as your comment is rather harsh. I'm sure that you would contest the issue if you were in the same situation.

[Lea_HTH]

No idea why you are repeating stuff that I already addressed.

 

Your assumption about my reading is about as silly as your assumption that the LVT will be interested in such a trivial non-issue.

 

My comment was not harsh - it was straightforward and to the point; you have clearly wasted more time trying to 'fight' this, probably in terms of emotion, irritatoin, anger, upset, not to mention actual hours, than is worth £60 lousy quid.

 

I would not be in the same situation - it wouldn't be worth my time to quibble over £60 IF I had been too lazy to pay my bills. Just to reiterate, there is no principle involved other than that they are entitled to the ground rent and entitled to reasonable costs in pursuing non-payment (well, one deduces there is actually a clause that states they are because you neglected to respond to that element of my post - I can infer from that, just as I infer from the terminology of your initial post that you did in fact receive invoices).

[Average_Joe]

You do not know the facts and have made incorrect assumptions.

 

However, feel free to pay the £60 or £120 on my behalf.

 

No idea why you are repeating stuff that I already addressed.

 

Your assumption about my reading is about as silly as your assumption that the LVT will be interested in such a trivial non-issue.

 

My comment was not harsh - it was straightforward and to the point; you have clearly wasted more time trying to 'fight' this, probably in terms of emotion, irritatoin, anger, upset, not to mention actual hours, than is worth £60 lousy quid.

 

I would not be in the same situation - it wouldn't be worth my time to quibble over £60 IF I had been too lazy to pay my bills. Just to reiterate, there is no principle involved other than that they are entitled to the ground rent and entitled to reasonable costs in pursuing non-payment (well, one deduces there is actually a clause that states they are because you neglected to respond to that element of my post - I can infer from that, just as I infer from the terminology of your initial post that you did in fact receive invoices).

[Lea_HTH]

You do not know the facts and have made incorrect assumptions.

 

However, feel free to pay the £60 or £120 on my behalf.

 

Well, unless you have deliberately LIED and MISLED the forum with the information you've provided in your many posts, then I think the facts are as you stated them. I inferred from your terminology - which is precisely what the LVT would do. Perhaps you don't know the difference between 'assuming' and 'inferring'. Fortunately I do.

 

Pay your own debts. If you'd done that in the first place you wouldn't be facing a paltry £60 charges sum.

[raydetinu]

Any progress on the freehold offer?

[Average_Joe]

Lea_HTH,

Your complete ignorance, arrogance and stupidity has given me much delight today.

 

Raydetinu,

Two of my neighbours have no knowledge of any freehold offer and a further neighbour has also stated that they too failed to receive any correspondence from the FH.

[Lea_HTH]

Bless. I am sure that made you feel a bit better - though it doesn't change the fact that I am right.

[andydd]

People..please no squabling on the forum.

 

Lets go back to the start.

 

I think we need clarification of what has actually been received by the OP.

 

It would appear that some sort of demand for ground rent was actually received judging by the comments "Now, prior to this letter, I had received no invoices for Ground Rent from this company that complies with legislation" and "To clarify, I have not received valid demands."

 

Am I correct in assuming that invoices were ground rent were received but you believe they didnt comply with legislation (S166 of Commonhold & Leasehold Reform Act 2002), why do you believe they dont comply with legislation ?

 

Being addressed incorrectly or asking for a further amount you have already paid wouldnt make thenm invalid in my opinion, s166 isnt very strict and it is very hard to send an invalid ground rent demand aprt from cocking up dates, i,.e sending it too early, earlier than the lease states, it isnt as strict as service charge demands which have all sorts of technicalities about exact wording and even font sizes, etc.

 

So it may be the case that the demand was in fact perfectly valid, perhaps you could redeact the details and post it here ?

 

If the demand is invalid or you received nothing then yes you are perfectly entitled to withold payment and any further admin charges would be unpayble too, however there are certain benefits to paying the ground rent even if technically you can withold, the main one being it removes from the FH any right to forfeit.

 

I think lea_HTH is being harsh when he quotes "You can read - so either the clause is in your lease, or it's not. ", this is not the case, many leases are written in confusing legalease and its often not clear at all, and many contain a catch all clause for example mine says "all other expenses incurred by the mangement and running of the building ", does this include admin charges ??, I'd say no and at my LVT the tribunal thought It did but the exact same clause has been interpreted differently by other tribunal members, in my case Im in dispute with the FH about maintenance of the driveway and the defination of 'building' is equally important.

 

The OP certainly has the right to apply to an LVT, there are many cases concerning small amounts and it could be sais that the OP just wants clarification on admin charges for the future, but it may be a good idea to pay theground rent and reduced admin fee but under protest and 'save up'this dispute and others untill you have a big list and then make an application to LVT (or the new name - Fisrt Tier Tribunal) in the future.

 

Again, check out the sale of the freehold issue. You can download title register from land Registry for £3 and this will tell you official owners, etc

 

Also check out this sticky thread on the isue of late payment charges from LandlordZone forum - http://www.landlordzone.co.uk/forums/showthread.php?55587-Late-payment-charges-SC-and-GR

 

Andy

[Average_Joe]

Apologies for any confusion. To make clear, I have received no invoice correspondence from the FH what so ever. I received a letter in February 2012, to state that they had acquired the FH. This letter was also incorrectly addressed, however, on this occasion it managed to find its way to my letter box.

 

Further to this introductory letter, I have received no invoices and required S166 Summary. The next correspondence was the LBA, again, incorrectly addressed.

 

I have spoken to other residents of this block of flats. Two of whom failed to receive the most recent invoice where as two others did. Both those who did not receive the invoice have attempted to contact the FH but emails and telephone calls have gone unanswered.

[andydd]

Aha. Well clearly this puts you in a better situation although there are still pros for paying the gr. I am in same situation, i received no gr demand so i havnt paid it, i previously was in county court and the fh claimed he had sent demands but when asked could show no proof or copies but be warned i doubt your fh is as dumb as mine !

 

The trouble is with this situation is that a small amount of gr can escalate into a bigger issue, there is something to be said though to taking the first positive step by making an lvt application to prove admin fee is not payable ( and as a result showing gr is not payable either , at least not yet).

 

Or you could sit back n let them chase you. I topk advantage of period of unemployment as i then didnt have to pay lvt or court fees.

 

Note there is no s166 summary, it just explains format of gr demand.