Ground rent problems

[Brunel]

I am in the onerous position of having to deal with SIMARC who are the agents for my freeholder.

 

I missed the payment of ground rent in January of £60:00, I have now received a demand for £120:00 which I believe is unreasonable.

 

The only method of payment is via the SIMARC web site using credit or debit cards, neither of which I have access to at the moment.

 

I have emailed SIMARC explaining the situation, but I cannot obtain a reply or any form of communication.

 

They have also threatened further costs, if I do not pay the full amount within 14 days.

 

Is there any further steps I could take?

 

Regards

[ericsbrother]

send a cheque to their office. If it is not part of your lease that a penalty or costs can be applied for late payment then the agents cant charge you. they work for the landlord, not themselves.

[Brunel]

send a cheque to their office. If it is not part of your lease that a penalty or costs can be applied for late payment then the agents cant charge you. they work for the landlord, not themselves.

 

Thanks, I am out of UK at the moment. I can only use electronic bank transfer.

 

Simarc are well known for this type of action. Lots of info on the web about them. They act for and own the actual landlord company.

 

So far have had no response from them.

 

I feel they will be awkward so as to increase any amount owing.

 

They usually threaten legal action, then ask for huge legal fees.

[andydd]

Ive just answered almost the same issue so ill cut n poaste my last reply...

 

 

 

 

Ground Rent is only payable if you receive a valid demand as per S166 of CALRA 2002 > http://www.legislation.gov.uk/ukpga/2002/15/section/166 if you dont receive it then the ground rent is not due and neither is any associated late payment charge.

 

However if this case went to court or FTT (http://www.justice.gov.uk/tribunals/...ntial-property) then it can be difficult to prove you didnt receive the demand, you may say you didnt get it, they may say they sent it, it may depend on did they send by recorded post, did other neighbours receive it ?

 

Secondly find your lease and read it, does it allow for late payment charges (many do not), also to be payable the freeholder/managing agent has to send you the Summary of Rights - Administration Charges > (many freeholders/managing agents forget this !) > http://www.lease-advice.org/publicat...asp?item=14#23

 

Even IF he has complied with all of the above, you as a leaseholder can apply to the FTT to determine the 'reasonableness' of such amounts (Note: They dont have juridstiction over ground rent BUT do have juridstiction over admin charges connected to ground rent). In my case, the FTT concluded that £25 would be a reasonable amount.

 

The LEASE site is very useful. > http://www.lease-advice.org/

 

Also have a look at S47 here > http://www.legislation.gov.uk/ukpga/1987/31 again this and S48 often catch landlord/freeholders out, Im not sure but I would of thought that any demands should show the adress of the landlord/freeholder and not just the management company.

 

Do you know who your Freeholder is ?

[Brunel]

@andydd Thank you for your informative reply.

 

I do know who my freeholder is, CAVERNLODGE they have the same directors as the agents SIMARC.

 

They are well known for intransigent behaviour.

 

As I mentioned previous, I am out of the UK at present, they have not responded to any of my emails to them.

 

They have sent a valid demand, the latest on 1 March threatening me with further costs.

 

"If we do not receive payment in full within 14 days of the date of this letter, we will obtain

details of the leasehold title from Land Registry. This will list other interested parties to the

lease, such as mortgage lenders. We may need to contact such parties to inform them of the

breach in their security. We may also pass this file for further action to our solicitors. This

will involve significant further costs being incurred for which you will be liable."

 

If you search CAG you will find multiple references to SIMARC.

 

I cannot pay any amount until I return to the UK later this month, a lot of problems for a mere £60:00

Edited March 7, 2014 by Brunel
Added extra info.

[andydd]

Yep..Ive heard of Simarc, my freeholder uses same trick in that management company is effectively the same company in all but name, but it appears nothing legally wrong with this, in my case, the LVT described it as a 'shell' company.

 

So in your case, look at the lease, does it allow admin/late payment charges ?, it may not.

 

Even if it does, many if not most fh/ma's simply forget to send the Summary of Right - Administration Charges attached to the demand for the extra charge, did you get one, if not then only the ground rent is payable.

 

Even then, you can apply to the FTT (previously LVT) to argue its not reasonable, I woulkd of thought £25 is a reasonable amount for a simple letter, however it may not be worth the hassle to save £35 !, but you could 'collect' a list of disputes and then make an application for lots of charges/amounts you think excessive or unfair upto 12 years in the past (for service charges) and 6 years for ground rent.

[andydd]

I cant believe they would contact the mortgage provider for such a small amount, in fact its a bit of a bluff.

 

In reality a mortgage company should only be concerned if the property is at risk, most leases have a S146 forfeiture clause but it only applies to amounts owing over £350 or 3 years and the amount must be deemed owing and the leaseholder in breach by a court/ftt, this is a very long process and rarely succesful, but keep your eye open....many mortgage companies are very dumb and some pay up sums when freeholders contact them in ignorance of the actual law.

[Brunel]

Any reference to mortgage provider is a complete nonsense, as there is not one.

 

It is now all in limbo, until they make the effort to contact me.

 

I have a feeling that they never will, hoping that they can increase any extra charges.

 

Regards.

[Brunel]

Possible success??

 

Dear Sir

 

Thank you for your email.

 

I have made a note that you will make payment at the end of this month.

[andydd]

No idea.

 

Many FH/MA's will try on all sorts of extra charges, when you look into it, the actual profit FH/MA can legally obtain is tiny, normally only the ground rent and a management fee, these are often very low, in my case £30 and £120, so my FH (and associated MA) can only make a profit of £150 per year, not much, this is why so many are involved in various dubioius schemes to make extra profits, the most common being extra charges for late payment (some have been accussed of deliberatly allowing leaseholder to run up GR arrears), various commissions/claims fees connecting to insurance - bumping up insurance premiums to sky high levels, high fees for consents to let, high management fees on building works = 15-25%, etc.

 

Have you looked at your lease re: administration/late payment fees ?

[Brunel]

Have you looked at your lease re: administration/late payment fees ?

 

I can only do that when I return to the UK.

 

I intend to pay only the required G.R.

[andydd]

Aha..Ok.. I forget. Due to my endless court battles with my FH I have so much leasehold stuff all scanned and on my OneDrive I can access it anywhere

[Brunel]

I have checked my lease, no mention at all Re. admin/ late fees.

 

Simarc just state: Our processing and other administration costs incurred to date have been added to your

account as per the attached schedule.

 

I did try to pay the normal G.R. this was rejected.

 

They will not accept anything less than than double the normal G.R.

[andydd]

Well..extra charges are only payable as per the lease, that is your contract between you and the FH/MA, they cant just add on extra charges when they feel like it.

 

Have you got the 'attached schedule' ?, I assume that just lists various charges.

 

If the lease makes no mention of charges and if youve tried to pay the GR but its been returned then you have done everything correct.

 

As mentioned above, the FTT is the tribunal to judicate on admin charges relating to GR (but not GR itself).

 

The proper course of action is to write to them asking them to point out the provision in the lease allowing them to charge admin charges, if no response write again pointing to the RICS Code that says they should correspond with you. (http://www.landlordzone.co.uk/forums/showthread.php?43583-Service-Charge-Residential-Management-Code-of-Practice).

 

If no satisfactory response send a NBA (Notice Before Action) and then if no luck put in an application to the FTT, claiming that admin charges are not payable, that youve tried to pay GR and ask for any costs/fees be reimbursed and ask for costs as per Paragraph 13 of FTT Rules (http://www.justice.gov.uk/downloads/tribunals/general/si-1169-l8-.pdf) due to the FH acting unreasonably.

[Brunel]

Thanks.

 

There is no attached schedule......

 

Probably they just double the actual GR

[andydd]

Ha..Muppets.

 

It wouldnt matter anyway, they can send whatever they like, its the lease that counts.

 

Did the demanmd for the extra charges also come with Admin Charges - Summary of Rights (worded EXACTLY as here > http://www.lease-advice.org/publications/documents/document.asp?item=89), if not another reason not to pay.

[Brunel]

In one word.....NO

 

On the online account page it just states " Total Fee and other charges"

Edited April 2, 2014 by Brunel
added extra info.

[andydd]

Well..after youve done the steps in #14 there are different schools of thought about applying to the FTT, you could just wait for them to chase you for the money and let them start legal action, but this can get complicated and some FH are too quick to approach your lender who sometimes pays up without even refering to you.........the recommended course is for you to be pre-emptive and apply to the FTT first but this can be a pain and youve have to pay fees upfront, although hopefully you can retrieve them.

 

Does the lease allow the FH to recoup legal costs ?, many do, but some dont (with the exception of S146 costs).

[Brunel]

Just had this reply from Simarc.

 

Dear Sir

 

Thank you for your email dated 1st April 2014 regarding the above mentioned property.

 

Firstly, please be advised that your ground rent is £60.00 per annum payable yearly in advance on 18th January each year and this is stated clearly in your Lease.

 

Please note our fees are determined by the time spent and work undertaken on each separate file. We are not obliged to go into any further details with regards to arrears file preparation as this is work undertaken by Simarc on behalf of the Freeholders.

 

 

Furthermore, as the leaseholder of the above property it is your responsibility to ensure that ground rent is paid on the due date or before with accordance to the lease. As you are no doubt aware you have failed to comply with the terms of your lease and as a result the Freeholders, have incurred charges due to late payment and a breach of lease.

 

 

 

You may wish to consider setting up a direct debit for future payments to ensure this problem does not arise again.

 

We hope this clarifies the matters and look forward to receiving your remittance in the sum of £120.00 within 10 working days.

 

If you are in any doubt whatsoever regarding this matter we suggest you seek independent legal advice.

[andydd]

What rubbish.

 

Did you ask under what provision of the lease they are payable ?

 

So lets go through it.

 

Yes, they are correct GR is payable in accordance with the lease (although S166 CALRA 2002 overides this where applicable).

 

As to how the sum is calculated, they would have to explain to an FTT how a fee is calculated so saying 'we are not obliged' isnt a fair answer.

 

Now it may technically be true that a breach has occurred (but of course never admit this), and possible scenarios are:-

 

1. They try and forfeit the lease (as per S146 of LTA 1926), BUT you cant do this for under £350 plus it is almost impossible for it to succeed these days.

 

2. Sue for damages, they claim youve breached, so they could in theory claim for damages to cover any loss BUT they havnt followed this route. (Plus like parking charges you could argue that £60 is not an actual loss)

 

3. Charge a set fee, this is the route they have chosen and is quite common IF the lease allows it, many modern leses will say that failure to pay will incur a charge (similar to banks/cards) or that any legal/other costs are recoverable.

 

So double check the lease, as you want to be sure they cant charge you, feel free to scan and post it or email it to me.

 

As mentioned in #16, your secret weapon is that despite all the above even if payable, you have right to withold as no Summary of Rights was included.

 

Here is great thread by the knowledable LeaseholdAnswers > http://www.landlordzone.co.uk/forums/showthread.php?55587-Late-payment-charges-SC-and-GR

 

Also to add, a wise move maybe to pay the full amount and then straight away start a county court claim to claim it back, small track CC claims are cheaper easier and faster than starting a claim at FTT.

[Brunel]

Once again, thank you for your ongoing advice.

 

I am awaiting an answer from Simarc, on the legality of their claim for admin charges.

[andydd]

Often FH ignore correspondence when it suits them and there is not much you can do about it other than keep reminding them of the RICS Code.

 

If you want to be a pain you can use S21 of LTA 1985 to request summary of service charges and even S22 to visit them and inspect paperwork.

[Brunel]

I can see this is going to be a hard battle, but I have no intention of giving in to their tactics.

 

P.S. We are self managed, the F.H. only collects G.R.

Edited April 3, 2014 by Brunel
Added PS

[andydd]

Ive been in endless battles for about 10 years, after the FH ripped me off I wised up, been refunded £1000 overpaid ground rent, had 6 years of their service charges (about £5000) struck out, and theyve been forced to refund me about £2000.. all good fun

 

If I were you I'd pay up (to avoid any risks) and then start court claim to get it back (plus interest, costs, etc).

[Brunel]

I believe that if I pay, it will be an admission that I am agreeing to their terms.