Service and admin charge court claim vs Countrywide.

[insspirito]

Dear forum members,

Countrywide have issued a court claim over a service charge arrears, legal fees and admin costs.

I’m a leaseholder (over 14 years) in one of three block development and the property is managed by residents company who have hired Countrywide to manage the property. They manage properties so badly that and estate agent has recommended my friend not to buy in the development.

 

I have refused to pay the service charge as the management company in in breach of lease and Countywide is in breach of its management obligations, in particular:

1. According to the lease Windows should be painted once every 3 years however they have not been painted for over 11 years, resulting in wood being rotten and irreparable.

2. The development had no freeholder since 1990 when the original freeholder went into administration (final dissolution 2010) and according to law, if the freeholders name is not on the service charge demand the bill is not payable, but in past they have charged several times for admin and legal fees in excess of 10K. When they tried to collect it from me last year, I told their solicitors, that there is no freeholder and they stopped sending me demands. I have an email from a director to countrywide saying that the freehold is sorted and now they can collect the service charge from me.

3. They are constantly ignoring my reports of problems.

- The gutter of the roof is blocked and the escaping rainwater damaged the porch which is in verge of collapse due to rotting.

] - The rear big communal light is not working for a year (despite three repair bills for the same light when it was working)

4. Excessive and unjustified expenses such as:

- During last year on light bulb replacements in communal areas alone Countrywide has spent £1,100 (there are not more than 45 communal lights)

Buildings insurance has risen to £9,800 while quotes have been obtained for as low as £2,800

- In 2011 £4,500 has been paid to chartered surveyors for holding a tender to paint the windows (quote obtained was £70,000 for 40 apartments ) .

Unnecessary expenses such as repeating Asbestos inspection, Out of Hours premiums, secretarial fees etc…

- Overly expensive general repair bills.

5. Excessive management fees (I have obtained quotes from 3 different companies with the lowest quote of £40

They have taken the service charge from me in past by the following means

County court 8 years ago (admitted and paid hence not disputed now)

Four times added to the mortgage

County court recent tried to defend but court was in another city and I could not attend nor transfer it to my city.

 

My question is, can I claim back the following charges going back 5 (if not 5 then how many) years and what are my chances in leasehold tribunal.

 

All administrative charges imposed by Countywide on me

All legal charges including past court fees

All charges from mortgage company for adding arrears to the mortgage

50% of service charge

+ 8% interest

 

Any additional advice would be much appreciated.

[honeybee13]

Hello there.

 

Are you dealing with the court claim and do you need advice on that as well?

 

HB

[insspirito]

Hello there.

 

Are you dealing with the court claim and do you need advice on that as well?

 

HB

 

Hi honeybee13,

 

Yes! Please ...

 

Do I have to make a counter claim or just defend the claim?

The claim court is in Northampton but I'm in Birmingham, should I contact the court to have it transferred to B-ham ?

As far as I understand the County Court is no qualified to review the case, will they automatically referee it to Leasehold Valuation Tribunal ?

 

Thank you.

[honeybee13]

I've flagged your thread for the legal guys on the site team.

 

It will help them to advise if you would fill in the information requested in this stikky and post it on this thread please. If you're in Scotland, it will be a different stikky.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?419198-You-have-received-a-Claim-What-you-need-to-do.-**UPDATED-December-2014**%281-Viewing%29-nbsp

 

HB

[mariner51]

Northampton Court sounds like MCoL claim.

Lnd Registry should provide details of new FH online for ~£4.

How do you expect M Co to do repairs if management fees re withheld?

In certain circumstances, Ts can oust M Co and take on management of block, I believe.

[SabreSheep]

The freeholder normally appoints the maintenance company. What Mariner may be referring to is the residents (51% or more) using their statutory right to purchase the freehold and running the maintenance themselves as a group.

[insspirito]

Northampton Court sounds like MCoL claim.

Lnd Registry should provide details of new FH online for ~£4.

How do you expect M Co to do repairs if management fees re withheld?

In certain circumstances, Ts can oust M Co and take on management of block, I believe.

 

Dear mariner51,

 

There was no freeholder up until last month, the original freeholder wen into administration in 1990 and the the Treasury solicitor has disclaimed the Crown's title of the property. now it's owned by council.

 

They are legally obligated to do the repairs regardless of arrears (I learned it from Leasehold advisory service)

[insspirito]

SabreSheep,

 

Residents are shareholders of the management company which in it's turn has hired Countrywide to manage properties.

[andydd]

Normally any contract (lease) is between you as a leaseholder and the freeholder, so any legal action is normally taken by the freeholder, BUT it maybe a tripartite lease which does make the management company party to the lease.

 

I assume that there has been an RTM application in the past and that the residents now manage the building, they in turn employ countrywide.

 

So you have previously paid/admitted amounts or charges have been added to the mortgage.

 

A few things don't add up, you say you were unable to defend one case and couldn't transfer it, this doesn't sound right, IF a case is bought by a company and you are a Litigant In Person the case should automatically be transferred to YOUR local court.

 

It does sound like you have a strong case, you can start a case at the First Tier Tribunal (Previously LVT) which deals with leasehold issues and can decide if services charges are too high and unreasonable.

 

It does sound as if the FH/MA has breached the lease, you could (counter)claim for damages/historic neglect for not doing repairs.

 

Also check if the lease allows for extra costs/legal fees, many do not, and they have to be demanded in accordance with the relevant laws.

 

Have a look at Lease Advisory Site and come back and maybe we can go through the issues one at a time as its rather complex

[andydd]

A few extra points, you can claim back upto 12 years of charges, Im not sure about the interest ?, I claimed 8% on wrongly overcharged ground rent but that maybe a different matter.

 

And yes,any court claim would normally be transferred to an FTT (LVT) and theyd transfer it back when they've finished to deal with court costs/fees, etc

 

Do you have a copy of the lease ?

 

As mentioned above it isn't sensible to withhold payment even if repairs are not done, youll find yourself in trouble, the lease normally obliges you to pay. Full Stop.

 

You have certain limited rights to withhold payment (Lease site explains this), or you should start a (counter)claim for damages if the MA isn't complying with their obligations.

[insspirito]

Thank you andydd,

 

As far as I know the management company was formed with the development and was in charge from start.

 

I admired the first claim and paid in full, the second one I send the response pack with an intend to defend, however my son was diagnosed with leukemia and I couldn't deal with the case, I remember waiting for the confirmation that the hearing will be in my city but that never came. Three time it has been added to my mortgage. During this time they where already in breach of the lease and there was no freeholder ( land registry did not know who was the freeholder).

 

I will have a look again at the lease and post my findings here.

 

Thank you again.

[andydd]

Ta.

 

Dont forget if you fail to defend you will of course lose. You can always ask for transfers/change of dates, etc in circumstances such as yours or request a paper-only hearing (my last two have been these, I think courts are doing it more to save costs).

 

As for mortgaghe companies paying up, this is quite common (to protect their interests) BUT this area doesnt appear well regulated, the mortgage co. should contact you and you could ask they not payas you dispute the mounts and will be seeking to challange them.

 

Hope this helps, it maybe time to start gathering your evidence. Are there other LHs in similar position ?

 

 

 

In any case, if the mortgage co. I think you could argue you didnt 'admit' the costs and therefore you have a right to challenge them later on.

 

Is there any legal action being taken against you ? If so you should defend.

 

If not, it maybe wise to start an FTT application for 12 years of amounts * you think were not payable or are unreasonable in amount, you will have to gather all you info/evidence and provide it to the FTT, this can involve lots of printing/copying so its handy to have access to a cheap printer (not a standard home ink one).

 

* But not for amounts already 'admitted' (In theory you can challange amounts paid)

 

The basic case would be:-

 

1. Certain amounts were not payable as there was no FH at the time. (Need to check on the exact legality of this, BUT AS I believe you metioned, it appears that S47 of Landlord & Tenant Act 1987 > http://www.legislation.gov.uk/ukpga/1987/31/section/47 is relevant, if no Freeholder (Landlord) then his name CANT be on demands and therefore nothing is payable).

 

2. Do demands comply with lease (issued at certain date, etc, certified ?) and do they comply with law (most relevant is inclusion of EXACT Summary of Rights - Service Charges, see here > http://www.lease-advice.org/publications/documents/document.asp?item=13, if not again,. not payable.

 

3. Does lease allow for extra admin/legal costs to be recovered, many (esp. older lease) do not, if the FH/MC points to a S146 clause in lease, they are getting desperate as it could be strongly argued in most cases this does not apply).

 

4. Were any demands for admin/legal costs accompanied by Summary - Admin Charges as per here > http://www.lease-advice.org/publications/documents/document.asp?item=89, MANY FH/MC cock this bit up.

 

5. It appears you would maybe have a claim for damages for breach of covenant (lease), as they havnt done repairs. (NOTE: I recently succesfully sued my Freeholder for this, I didnt get much in amount though as its hard to prove an actual loss tyo yourself), this would be good as a counterclaim should action be taken against you.

 

6. You may have a claim for historic neglect (This is that the repair cost is more now than it would of been had they done the work years ago).

 

7. Finally. All service charges can be questioned if they are excessive and unreasonable, for example..You can get cheaper insurance (also ask if there are hidden commisions/kick backs), you need to try and get a quote that is in same terms as FH, this can be tricky). As for mamagement fees, nearly every LVt would allow £150-£200 pr LH, so the £40 quote is a non starter (The baiscs of Leasehold law are that just becuase somethjing can be done cheaper it doesnt mean the FH must choose it, but he must shop around a bit and get a reasonable quote in line with others).

[honeybee13]

Hello again.

 

As there are court documents, I've moved this to the general legal forum for further advice.

 

HB

[insspirito]

Thank you andydd,

 

I'm doing my research and will post in a day or two.

 

When writing the defense is there any specific language or way ... or should I just write and explain myself as I can ... (with all the evidence attached)

[andydd]

There are various other posts on here on how to write defences, etc. Simply you should go through the points made by the other side and either admit or deny the claim.

 

A lot depends on whether the other side start a claim against you (presumably in County Court which should in theory be transfered to FTT (LVT)), or whether you start a claim at FTT, at CC you are basically claiming that someone owes you money, at an FTT you can ask them to decide on expenditure, this can be amounts you have paid in past (but not admitted), amounts owing or even future expenditure.

 

Will you be making an FTT claim ?

[insspirito]

Dear forum members,

 

I have prepared a defense and would be happy to hear your opinions and advise.

 

Please click here to see it (a Google document)

 

Thank you.

[andydd]

Had a quick look, seems ok.

 

Have a look at the lease to see if its between FH and you or FH and Management Co. and you, this may affect things. Its normally the former but sometimes tripartite leases exist.

 

When complaining about management issues, remember its not mandatory to provide a good service but you could get the fee reduced, its worth reading the RICs code here > http://www.leaseholdlife.info/reports/Rics_Code.pdf go through it an identify any areas and the specific number of areas where you say they are in breach of the codes. (Which I see you have done).

 

Some parts do come across as a bit 'moaning' about the FH, remember a Judge knows nothing, every accusation you make has to be backed up by evidence, reports, surveys, photos, witness statements, etc

 

As for asking for a strike out, this is unlikely, a court does have the power using its own initiative to strike out all/or part of cases BUT IMO rarely uses this power and the only alternative is to make an actual application to strike out all/part of their claim using the Summary Judgement process BUT be aware you are saying the claim has absolutely no merit and doesnt even need to go to trail, the lack of S47/S48 may fill this criteria as you are saying that the demands are invalid..full stop..Be aware though that this process is done pre allocation so it wont be on small track so normal costs apply, good if it goes your way, you could ask for £300 costs or so but if you lose and the claim is deemed even a bit worthy to go to a full trail then the other side could claim costs..Ive used summary judgement/strike out successfully a few times, its a good tool.

 

If you are very certain that the demands are invalid due to s47/s48 Id be very tempted to ask for SJ/Strike Out and that will be it, no need to argue about wheher charges are reasonable or not.

 

Have a look here > http://www.pannone.com/sites/default/files/Summary%20Judgment%20and%20Striking%20Out_E.pdf

 

The issue of FH beaches could be done separately or used as a counterclaim/setoff, I recently won against my FH but it was hard to prove any damages or loss and I was only awarded £100 but it was useful and has proved my point and will be used in future battles.

[insspirito]

Thank you andydd,

 

One thing they have ALREADY taken me to CC, so this is a defense, and 53% of the claim sum are legal fees and admin charges.

 

The leas is a tripartite lease ... FH - Management Co and the leaseholder

 

However, after I confronted their admin charges and refused to pay because of s47/s48 they stopped sending me demands for 6 months for that specific reason of s47/s48, and I do have the email communication between the agent and a director confirming that they now have the FH name and have instructed solicitors ... without contacting me

 

I think you're right, I will write down what I think is unreasonable and ask to deduct that from the demand.

 

Management fee (entire management fee), excessive gardening, secretarial and accounting, inspections (repeated asbestos), half the insurance, (I have obtained 3 times cheaper quote), reserve fund as they are using it for expensive and unnecessary repairs ...

 

£300 costs, do you mean my research ?

I wanted to ask for every single admin charge and legal fee to be returned as they where in breach of lease since day one, not counting the s47/s48

 

Regards ...

a very tired leaseholder.

[andydd]

Well..the time for applying for SJ/Strike Out is anytime before allocation, but I believe it can be done after..have a look at the link I sent.

 

I believe you could make an application under Strike Out CPR 3.4 (NOTE: Always try to reference the relevant CPR's..Courts like that, also remember each CPR has a Practise Direction which youll find helpful) to ask that PARTS of the original claim be struck out, in this case the service charges part due to S47/S48.)

 

If you have a valid reason NOT to pay service charges (due to S47/S49) then any resulting admin/legal/extra costs are also not payable, also check the lease, extra admin/legal fees are only payable IF the lease allows and IF demanded accompanied with Admin Charges - Summary (see here > http://www.lease-advice.org/publications/documents/document.asp?item=89) even then you can challenge reasonableness of amounts.

 

Approx £300 costs, yes research..put down 5 hours x £18, etc..There is official statement of Costs form to use for this. (This would only apply to pre-allocation stuff).

 

I mention summary judgement/strikle out coz in most circumstances regarding non payment of service charges due to s47/s48 or more commonly failure to include correct Summary of Rights, it gets transfered to FTT (LV) and they say something like..£xx amount is reasonable and point out that all the FH has to do is reserve demand with correct paperwork and hey presto its payable !... If you make an early strike out application at court, the court is not looking forward to how and when the demands could be rectified, you are effectively saying, its not payable right here and now so strike it out.

 

NOTE: Doing a SJ/Strike Out in this way means a different application its not part of the defence.

[andydd]

Its worth looking at this > http://www.landstribunal.gov.uk/judgmentfiles/j1129/LRX-56-2014.pdf a binding Upper Tribunal decision where they appear to say a S47 isnt required IF its a tripartite lease where it says you pay the management company.

[insspirito]

Its worth looking at this > http://www.landstribunal.gov.uk/judgmentfiles/j1129/LRX-56-2014.pdf a binding Upper Tribunal decision where they appear to say a S47 isnt required IF its a tripartite lease where it says you pay the management company.

 

Hmmm Should I include it just in case ... couldn't hurt, could it ?

Also It is hard to sell if there is no Freeholder / Head Leaseholder.

 

How about the ground rent ?

 

It was an interesting case tough ...

[andydd]

NO !..you dont want to include that case as it could go against you, the original LVT said that service charge wasnt payable coz no S47 but the Upper appeal court said it didnt need to comply with S47, dont agree with that but your FH could refer to it, if hes aware of it !.. But it depends on how your lease it worded, does it say you have to pay Freeholder or Management Company ?

 

Ground Rent is something different, as long as demand has been sent according to S166 > http://www.legislation.gov.uk/ukpga/2002/15/section/166 then its payable, the FTT/LVT has no juridstiction over this BUT they do have juridstiction over admin charges relating to non/late payment.

[insspirito]

My defense was submitted on on may 5th but the claimant asked for a judgement on 1st, so a judgement has been made against me (it took a lot longer to write the defense than I anticipated) . What are my options?

 

1. Pay the money and take them to court (court fee of £410)

2. To apply for judgment to be set aside (court fee £150)

3. do I have any other options?

 

Thank you.

[Ganymede]

My defense was submitted on on may 5th but the claimant asked for a judgement on 1st, so a judgement has been made against me (it took a lot longer to write the defense than I anticipated) . What are my options?

 

1. Pay the money and take them to court (court fee of £410)

2. To apply for judgment to be set aside (court fee £150)

3. do I have any other options?

 

Thank you.

 

What do you mean by option 1? Pay the Claimant and then try to sue them to recover the amount you've just paid them?!

 

That's not really a good enough reason for late filing of a Defence so I wouldn't be overly confident on option 2.

[andydd]

My defense was submitted on on may 5th but the claimant asked for a judgement on 1st, so a judgement has been made against me (it took a lot longer to write the defense than I anticipated) . What are my options?

 

1. Pay the money and take them to court (court fee of £410)

2. To apply for judgment to be set aside (court fee £150)

3. do I have any other options?

 

Thank you.

 

 

If he asked for and got judgment on 1st then it sounds like you were late filing your defence, what were the dates for filing defence ?

 

I too don't really understand option 1, you will find it difficult to take them to court again because the case has been judged and any attempt to re-open it or re-litigate may be an abuse of process. (It would need to be set aside as per Option 2).

 

If judgment has been given and you were late filing the defence its possible to ask for a set aside (Option 2), assuming you have a good reason/excuse.