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Ground Rent- Demand from Simarc and solicitors letter


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I have a terraced house with a lease that is 999 years old

 

 

in July this year I received a ground rent demand with additional admin charges totalling £198

 

 

I panicked and wasn't sure what to do

 

 

I thought the extra admin charge was ludicrous and wrote back to them but receive no reply

 

 

since then I have received additional ground rent demands and on 9 December received a letter from a firm of solicitors Landau and cohen demanding an extra £180 (£150 plus Vat)

 

 

the ground rent demand is for the period 1/4/11-1/4/2015 which is £6

 

 

with fees added on top the bill now stands at £384

 

 

the letter is threatening possession of the property

 

 

I am trying to get a copy of the lease from my solicitor or the land registry company

 

 

Any help or advice is greatly appreciated

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Simarc are famous for their overinflated admin fees for processing GR payments, have a look at your lease to determine if you are obliged to pay anything at all for admin, some will, some wont. If the lease doesnt allow it then you dont owe a penny other than the £6. The solicitors cant add their fees as this is a debt collection matter not a court claim so they havent followed the right procedures to make this extra amount lawful. When you have a copy of your lease have a word with Shelter and see what they say if it is ambiguous or says "reasonable expenses" or the like. Also, was the original GR demand sent out in the prescribed time and proper format? If not then nothing is due until it is.

Also, what happened in the past regarding the collection of GR or is this a new purchase and thus a new problem? If the latter speak to your conveyancing solicitor and ask them what enquiries and answers were made at the time of purchase.

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Thanks ericsbrother

 

i have owned the property 20 years and the first time i received a GR demand after several years was in July this year with a ground rent arrears fee of £60 and referral fee of £138 added on

 

i am trying to obtain a copy of the lease from my solicitor tomorrow morning

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Right having read the attachments Im now annoyed.

 

How dare they threaten leaseholders in this way!

 

The OP may owe £6, the lease clause that Simarc refer to says nothing about recovering legal costs, its just about forfeiture BUT "If the breach relates to arrears, you cannot serve a valid section 146 notice where the amount of service charges, administration charges or ground rent owed (or a combination of all of these) total less than £350, or have been outstanding for less than three years. It is not necessary to serve a section 146 notice if the breach is for ground rent arrears" (From LEASE site)

 

As the amount alleged owing (before the added costs)is under £350 then the FH CANNOT start any proceedings about forfeiture and he CANNOT recover any extra legal costs (although we havnt seen the full lease but the Fh has already pointed top the clause he thinks he can use, HE IS WRONG !).

 

The total amount owing is £6.

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Good bit here on Forfeiture > http://www.landmarkchambers.co.uk/userfiles/documents/resources/KMY%20Forfeiture%20November%202014.pdf

 

Relevant stuff for OP is...

 

Rent

 

42. What if your over-enthusiastic client landlord wants to forfeit the long residential lease

because the tenant has not paid £200 of rent for one year after it fell due. Can he? The

short answer is, no. Section 167(1) of the CLRA prevents the landlord from exercising the

right of re-entry or forfeiture for failure by the tenant to pay an amount consisting of rent,

service charges or administration charges (or a combination of all three) unless the unpaid

amount

 

(1) Exceeds the prescribed sum. At the moment this is £350.

 

(2) OR consists of, or includes, an amount which has been payable for more than the

prescribed period. Currently, that period is 3 years41

.

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Id get letter off to Solicitors saying something like..

 

Dear Sir/Madam

 

Re: Your recent correspondence.

 

I enclose a Ground Rent cheque for the amount of £6.

 

As for amounts for ‘Arrears Fees’ of £198 and ‘Referral Fees’ of £180 I do not agree that they are payable under the lease.

 

The clause you refer to does not allow for the recovery of such fees, it is a clause regarding forfeiture, a Landlord cannot start forfeiture proceedings unless the amount owing is greater than £350, I refer you to S167(1) of The Commonhold & Leasehold Reform Act 2002, as the amount of Ground Rent allegedly owing is £6 there is no prospect of forfeiture proceedings and any associated costs are not recoverable under the lease.

 

I also suggest you read the Upper Tribunal Case LT Case Number: LRX/90/2013 Hilary Ann Barrett v Mrs Anne Robinson. (http://egiewcms-test-auth.elasticbeanstalk.com/legal/barrett-v-robinson/)

 

You now have two options:-

 

1. To accept payment of the amount of £6 and remove the extra charges

 

2. To start court proceedings which I will vigorously defend and seek to claim my costs.

 

But best double check lease first

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mariner 51, that is the only letter I have received and hence the shock apart from the solicitor letter afterwards

 

 

I have looked at other threads and seen that the ground rent company can reply with the argument ' you and the landlord are in a binding contractual relationship. Your failure to pay GR is a breach of contract. Any Party breaching a contract is liable for the resultant costs incurred by the innocent party.

 

 

does this mean extra charges can be incurred If the ground rent company takes it further or can 'reasonable costs' eg £25 per letter be incurred?

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The letter from the solicitor is full of crap.

 

Yes you owe £6, yes there prob is a forfeit clause BUT legislation overrides terms of the lease, legislation says that forfeiture cannot begin for amounts under £350, you owe £6 so there is no risk at all of forfeiture.

 

They can just go on adding arrears fees and other rubbish to make it more than £350.

 

So.

 

1. Can they add on extra fees, possibly if the lease says so, Id guess it doesnt.]

 

2. Can they add on extra fees using forfeiture clause (the most common trick by Smarc), NO, cause for £6 there is no threat of forfeiture, NO, coz amount is under £350, plus there has to be genuine attempt to follow forfeiture route, i.e NOT a normal money claim, also demanding and accepting ground rent would be a waiver.

 

3. Lastly even if payable, a FTT would almsot certainly conclude that for £6 its unreasonable to incurr costs that far outweigh the actual tiny amount.

 

Yes we cant use the S word on here but its a con, Simarc are known for it, trying to get large amounts for late payments of tiny amounts of ground rent.

 

Well lease arrives we can confirm, everything.

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andy dd

 

i have type the letter, it is going first class in the post tomorrow

 

i am waiting for the copy of the lease from land registry (can only be applied by post, turnaround time is 5 days, fee is £7) my solicitor and both myself dont have a copy

 

i read the link by mariner51,the line below confused me, is it implying forfeiture clause can be used if admin charges and ground rent COMBINED are greater than £350. I thought it had to be ground rent only?

 

 

'This section provides that a landlord cannot use the forfeiture procedure under the lease unless the amount owed for ground rent, service charge or administration charges (or a combination of them) is more than £350'

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Yes..Link is correct, forfeiture can apply if GR, SC and Admin charges are above £350...

 

BUT....if assuming the lease doesn't have a general legal costs clause then they cant use the forfeit clause to add admin costs.

 

So you owe £6, can they use forfeit clause to add extra costs ?, NO coz amount owing is £6, it stops there, they cant go on adding extra amounts on (if you think about it, this would be stupid coz a FH could say LH owes £6 but ill just add on made up extra admin charges of £345, oh look the £350 rule now doesn't apply).

 

In any event even if you did owe over £350, can they claim to be following forfeit route purely as an excuse just to add costs, case law is a bit messy on this, but generally most would say no and latest case law would support this, again see my link in post #6, in that the LH ACTUALLY owed £301, but the FH claimed another six grand odd in admin/legal costs, did she owe £301 + £6000 ?, NO, she owed £301, the court correctly said (at end), as amount owing is £301, the FH CANNOT start forfeiture and also cannot add on forfeiture costs of £6000, your case IMO is identical.

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  • 4 weeks later...

Had a quick look at their letter, lease is a bit hard to read.

 

So they are saying that the ground rent is over 3 years late ?, did you receive a demand in 2011 ? (If not then the admin charges are also not payable). have yoyu recived any ground rent demands since 2011 ?

 

Ill try and get through the lease that may explain more.

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Is that all the lease ?. Only 4 pages, I assume you dont pay service charges or anything, I dont see an obvious legal costs clause (these only are in modern leases so didnt expect to), BUT I dont see any standard forfeiture costs either !.

 

Right so ground rent is Thirty Pounds 19 shillings and sixpence (dunno how that converts to modern currency, £6 ?), payable twice a year on 1st of April & October BUT only if valid ground rent demands received.

 

What correspondence have you received since 2011 ?, Further demands ?, any work done on property ?, Visits ?

 

Possible defences are:-

 

1. No GR demand received in 2011 (Its odd you only have one demand for 2015 GR for £6 and that they are demanding £6, if you genuinely owed something in 2011 then surely amount owing would be at least £12 ?) I think they might find it difficult in court as a judge could be equally confused.

 

2. The actions of landlord have waived any right to forfeit, acting in manner to recognize lease continuing, further demands, doing work, etc

 

3. Ask an FTT that amount is unreasonable (Is it reasonable to incur costs of £350 to chase £6, which you have been trying to pay ?) and is now 4 years old ?

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Ok after looking at your original attachments, letter from solicitors its a bit confusing, it says ground rent 2011 - 2015 but it only mentions £6, which appears to be the gr for 2015, surely it would be 5 x £6 = £30 ?

 

The ground rent demand from landlord is dated 2015.

 

It appears to me that the demand for £6 relates solely to 2015, so where do they get the over 3 years bit from ? And why havnt they demanded GR for the other years ? What was demanded in 2011 if anything, they mention writing to you in 2013-2015 but not earlier, they may be hard pushed to claim they did actually send a demand in 2011.

 

I think another stroppy letter to them is needed, how very dare they say you should get intent advice, IMO, it is often far better than CAB provide for example and even the official LEASE site is often lacking in all but the very basic advice.

 

Did you tell them you visited an internet site are are they spying ?

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I think they are spying to be honest,

 

 

the solicitor in my first post is claiming that they wrote to me on the following dates in 2013 (20 feb, 15 april ) 2014 (20 feb, 15 april, 27 May, 1 September), 2015 (18 feb, 20 feb, 15 april, 6 may, 13 may, 29 july and 9 November)

 

 

I think the yearly ground rent is £1.20

 

 

the thirty punds 19 shillings and six pence refers to a whole street of which the house is only a tiny part of

 

 

what would be the logical next step?

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Aha so they are claiming its 5 x 1.20 = £6, clearly they don't give a toss about six quid, they are just **** bags trying to rip people off with admin fees, in any event the lease doesn't allow any such fees not even under a s146 clause. I'll look at it more tommoz.

 

Andy

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I have a terraced house with a lease that is 999 years old

 

 

I doubt it, nothing much built in 1016 AD remains habitable, certainly not a residential terrace.

Initial Lease may have a term of 999 years, but if GR is £1.20 pa I guess it was built prior tto WW2, when the normal long Lease was for 99 yrs. If GR for your property is £1.20 pa, it may be worth investigating purchase of your freehold.

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Fire off a quick letter to solicitor and landlord and ask what clause allows them to add the extra charges on ? Admin of legal charge clauses are only going in modern leases, yours appears to have no such clause more even the standard s146 costs one which I assumed it would have, without this they are simply forbidden to add on extra charges.

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Thanks Andydd

 

i will getting that off

 

i have examined the lease again and cant see any provision for legal costs

 

is it possible there is a more updated lease they are acting from (surely there cant be?)

 

so in effect no legal costs mean they shouldnt have added them on, i cant even find a s146 costs clause, the lease appears to be really old (it is the one the land registry site sent me and is correct)

 

Im pretty sure the only letters i received from simarc i received were in 2015 with a GR demand £6 (5*£1.20 for April 2010)-2015, they seem to be threatening forfeiture under the proviso that i am more than 3 years in arrears and have returned the cheque for £6

 

i think they have acted very unreasonably

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