Solicitors letters RE admin fees+legal fees for unpaid Ground Rent

[SueDeNimes]

I have just received two letters from a solicitor acting for the freeholder of the flat.

 

We are currently in arrears on the ground rent on our flat. It isn't a huge amount, £250.

Unfortunately I have been off work due to disability for the last two years.

 

First letter was dated 23rd March.

It demanded payment of the account in full within 7 days.

They also added £180 in admin fees for the landlord and a further £120 in legal fees for the solicitor.

 

Second letter was dated 1st April.

It says they have choice but to issue proceedings as they have not heard from us.

They have added a further £69 bringing the total due to £619.

They have now also contacted our mortgage lender as well.

 

We only received both letters today.

The reason being is that we collect our post from the local sorting office every few days.

(We have had issues with post going missing in the building previously)

 

This has caused a huge amount of distress and I wanted to figure out where I stood and the best course of action.

I'm a little bit perturbed that they think they can issue a demand for full payment within 7 days

of the date of the letter when that covers Easter.

 

Should I contact the landlord on Monday or the solicitor?

 

Some notes.

We don't seem to have received any "final demand" or similar from the landlord.

Also, the letter of the 23rd of March includes a latest statement dated the 22nd of March.

We haven't received that from the landlord.

 

The last contact from the landlord was an application for payment dated 27th November 2015

 

Looking back over things we had a "final reminder" dated October 2015.

Edited April 2, 2016 by SueDeNimes

[dx100uk]

http://www.consumeractiongroup.co.uk/forum/showthread.php?460512-Property-Management-Company-Debt-Arrears-Fees

[AndyOrch]

" Should I contact the landlord on Monday or the solicitor? "

 

I would contact both and try to agree some kind of mutual payment plan...less the fees.

 

Andy

[andydd]

If the LEASE (not tenancy) allows such fees to be added then they are within their right to do so.

Edited April 2, 2016 by Andyorch
Edited quote

[andydd]

I have just received two letters from a solicitor acting for the freeholder of the flat.

 

We are currently in arrears on the ground rent on our flat. It isn't a huge amount, £250.

Unfortunately I have been off work due to disability for the last two years.

 

First letter was dated 23rd March.

It demanded payment of the account in full within 7 days.

They also added £180 in admin fees for the landlord and a further £120 in legal fees for the solicitor.

 

Second letter was dated 1st April.

It says they have choice but to issue proceedings as they have not heard from us.

They have added a further £69 bringing the total due to £619.

They have now also contacted our mortgage lender as well.

 

We only received both letters today.

The reason being is that we collect our post from the local sorting office every few days.

(We have had issues with post going missing in the building previously)

 

This has caused a huge amount of distress and I wanted to figure out where I stood and the best course of action.

I'm a little bit perturbed that they think they can issue a demand for full payment within 7 days

of the date of the letter when that covers Easter.

 

Should I contact the landlord on Monday or the solicitor?

 

Some notes.

We don't seem to have received any "final demand" or similar from the landlord.

Also, the letter of the 23rd of March includes a latest statement dated the 22nd of March.

We haven't received that from the landlord.

 

The last contact from the landlord was an application for payment dated 27th November 2015

 

Looking back over things we had a "final reminder" dated October 2015.

 

Ok lets start at the beginging.

 

1. It is very important to pay ground rent it can lead to losing your home.

 

2. Ground Rent is payable when demanded in accordance with S166, see here > http://www.legislation.gov.uk/ukpga/2002/15/section/166

 

3. Extra fees are ONLY payable if the lease allows, have a good read, many do not allow such fees but freeholders love trying it on. It may have a vague clause they are trying to use, write to them and ask what clause in the lease allows this.

 

4. Even if the lease allows, these charges are Administration Charges and only payable if demanded and accompanied by correct up to date "Administration Charges - Summary of Rights" , See here > http://www.lease-advice.org/publications/documents/document.asp?item=89 Many FH forget this or use wrong version.

 

5. Even if above is correct you can apply to FTT to ask iof its reasonable, at my FTT (first Tier Tribunal), they concluded that £25 would be suitable amount for sending me a letter. Its doubtful its cost them £180 !!

 

6. They shouldnt contact lender as forfeiture is only possible for amounts over £350.

 

Send them the £250, they maybe awkward and return it, this is a common trick.

 

So read lease, post it or relevant bits here, write asking which clause allows them to add fees.

[SueDeNimes]

Ok lets start at the beginging.

 

1. It is very important to pay ground rent it can lead to losing your home.

 

2. Ground Rent is payable when demanded in accordance with S166, see here >

 

3. Extra fees are ONLY payable if the lease allows, have a good read, many do not allow such fees but freeholders love trying it on. It may have a vague clause they are trying to use, write to them and ask what clause in the lease allows this.

 

4. Even if the lease allows, these charges are Administration Charges and only payable if demanded and accompanied by correct up to date "Administration Charges - Summary of Rights" ,

 

5. Even if above is correct you can apply to FTT to ask iof its reasonable, at my FTT (first Tier Tribunal), they concluded that £25 would be suitable amount for sending me a letter. Its doubtful its cost them £180 !!

 

6. They shouldnt contact lender as forfeiture is only possible for amounts over £350.

 

Send them the £250, they maybe awkward and return it, this is a common trick.

 

So read lease, post it or relevant bits here, write asking which clause allows them to add fees.

 

Thanks this is really good to read. The lease is a very old lease and will take me some time to review. How do I hold off the dogs on Monday?

 

Can I contact them stating I am disputing the additional fees they have levied?

[AndyOrch]

Thanks this is really good to read. The lease is a very old lease and will take me some time to review. How do I hold off the dogs on Monday?

 

Can I contact them stating I am disputing the additional fees they have levied?

 

I would be concentrating on dealing with the arrears first off.

[SueDeNimes]

I would be concentrating on dealing with the arrears first off.

 

I can't pay that until Thursday next week. (And I can't actually afford to do so, it will require some good will on behalf of people like the gas company and also possibly a visit to a food bank)

[mariner51]

G Rent is normally payable every 6 months in arrears (Mar & Sep? in this case), so how much is payable every 6 months? ie how many missed payments does £250 represent?

Freeholder does not have to send late payment reminders in the interim but the 6 month s166 Demand will prob show

 

Re

 

Ground Rent is due to us on dd/mmm/yyyy as hereunder:

 

 

Ground Rent (half yearly in arrear): £x.xx

Arears Outstanding: £y.yy

--------

Total Due: £z.zz

 

Then the required legal Notices reqd by the Landlord & Tenant Act 1987. with name of Freeholder & postal address for payment somewhere on Demand, poss with a tear-off payment slip,

[AndyOrch]

By " concentrating " I was actually referring to making proposals and appeasing the LL and Sol...not necessarily paying the whole arrears off in one foul swoop.

[andydd]

G Rent is normally payable every 6 months in arrears (Mar & Sep? in this case), so how much is payable every 6 months? ie how many missed payments does £250 represent?

Freeholder does not have to send late payment reminders in the interim but the 6 month s166 Demand will prob show

 

Re

 

Ground Rent is due to us on dd/mmm/yyyy as hereunder:

 

 

Ground Rent (half yearly in arrear): £x.xx

Arears Outstanding: £y.yy

--------

Total Due: £z.zz

 

Then the required legal Notices reqd by the Landlord & Tenant Act 1987. with name of Freeholder & postal address for payment somewhere on Demand, poss with a tear-off payment slip,

 

GR is more commonly payable once annually although bi-annually is often used too however it almost never in arrears, its nearly always in advance.

[andydd]

Thanks this is really good to read. The lease is a very old lease and will take me some time to review. How do I hold off the dogs on Monday?

 

Can I contact them stating I am disputing the additional fees they have levied?

 

If valid demands have been sent than the amount is owing there is little you can do to hold them off, the real question here is the extra charges, however I cant really see how they could increase by holding off for a week.

 

Ill PM you, feel free to scan the lease and send it to me and Ill have a look, older leases rarely have any provisions for extra charges so I suspect they are trying it on, this is very common with certain freeholders who use it simply as a money raising scheme.

[SueDeNimes]

I have managed to go over the lease.

 

Some points on this.

 

1: We went through a right to manage process about 4 years ago. This leaves us with a RTM company that collects the service charge and maintains the building.

2. The only sum due to the Lessor is the ground rent. Payable twice yearly.

 

From looking over the lease there appears to be a clause allowing unpaid service charges to be collected and interest of 12% PA charged on them.

 

The lease mentions the rent due and then it moves on to covenants. There are several coveneants that detail what we have to do. All costs are born by us.

 

There is a clause in this section as follows :

 

To pay all costs charges and expenses (including legal costs and fees payable to the Lessor's surveyor) incurred by the Lessor in or in contemplation of any proceedings under Sections 146 and 147 of the Law of Property Act 1925 in respect of the demised premises notwithstanding forfeiture is avoided otherwise than by relief granted by the Court and also to pay all costs charges and expenses incurred by the Lessor in relation to the preparation and service of a Schedule of Dilapidations at the expiration or sooner determination of the term hereby granted (including legal costs and fees payable to the Lessor's Surveyor)

 

There is another section which covers rent

 

Provided Always that if the ground rent hereby reserved or any part thereof any of the further or additional sums set forth or referred to in sub-Clauses (3) (10) (12) (16) (18) of Clause 3 and in Clause 4 of this lease shall at any time be unpaid for the space of twenty-eight days after the same shall have become due (whether the same shall have been legally demanded or not) or in the case of any break non-performance or non-observance of any of the Lessee's covenants herein contained then and in any of the said cases it shall be lawful for the Lessor (not withstanding the waiver of any previous right of re-entry) to enter into and upon the demised premises or any part thereof in the name of the whole to repossess the same as of it former estate and thereupon the term hereby created shallabsolutely determine but without prejudice to any right of action or remedy of the Lessor in respect of any antecedent breach of any of the covenants on the part of the Lessee herein contained

[SueDeNimes]

I unfortunately was the victim of a large fraud several years ago which ended up with me losing all my savings. My credit record has been squeaky clean since than and this month the last default on my account drops off. I am very keen to hold onto a clean credit rating.

 

The demands for payment of the ground rent have been served correctly from what I can see. The demand for extra fees have simply been demanded in a solictors letter. They make no mention of my rights. They also make no mention of what clause of the lease they are charging under.

[SueDeNimes]

I had intended to write a letter today and email them a PDF copy this evening so they have it tomorrow AM. I will also drop a letter in by hand. It was going to be something along the lines of the following.

 

 

Dear Solictor's Name,

 

I am writing to you in reply to your letter dated the 23rd of March and also your subsequent letter dated the 1st of April. These were both received by me yesterday, the 2nd of April.

 

I apologise that I have fallen behind in the ground rent payments. Unfortunately I have been off work for the last few years due to a disability . I have been receiving disability benefits from the DWP during this time. As a result of the financial and health impact of this I have been unable to make payment to date. I am not in a position to pay the arrears at this point in time. I have been able to seek support from family and can pay the arrears in full later this week and could have a cheque sent to you upon acceptance of this.

 

I must say I am concerned at some of the content of your letters. As I understand, in such dealings there is a requirement that a private Lessee be treated fairly and reasonably. I am at a loss as to how your demand of full payment within 7 days can be either fair or reasonable. Especially when these seven days included the 4 days of Easter.

 

I also believe the additional charges you have levied are unreasonable. Could you please confirm for me which clause of the lease you are claiming these under? I note that these were also not accompanied by a ""Administration Charges - Summary of Rights" statement.

 

As these additional charges have not been correctly issued they are not currently valid. This means at this point in time the total amount outstanding is £250. As I understand it forfeiture is only possible on amounts over £350. As this is the case you would have no right or obligation to contact my mortgage lender. Can you please confirm that this has not been done?

 

I will telephone you on Monday morning to confirm receipt of this letter. You shall also have a hard copy delivered by hand on the same day.

 

Yours Faithfully

 

SueDeNimes

[andydd]

I had intended to write a letter today and email them a PDF copy this evening so they have it tomorrow AM. I will also drop a letter in by hand. It was going to be something along the lines of the following.

 

Alas they dont have to be fair and reasonable, youve signed lease and must pay what it mentions. Dont say you cant pay arrears, this will put you in worse position, you really need to try and pay the ground rent asap.

 

If GR has been validly demanded, you MUST pay on time.

 

As I mentioned in my PM, I think the lease may allow for them to recover actual costs incurred by employing a solicitor for example but not to just add on an admin charge of £180 unless they have specifically employed someone and paid them £180.

 

DONT mention the bit about Admin Charges - Summary (all they will do is then send you one !), keep this quiet for now or just say "I dont believe your demands comply with current legislation"

 

Yes point out that amount owing is less than £350 so they cant forfeit.

 

Good guide here > http://www.lease-advice.org/documents/Service_Charges.pdf

[SueDeNimes]

How would it go if I went into the landlords agent tomorrow and gave them a cheque for £250?

[andydd]

If that's the ground rent owing then that's fine, have they been charging £60 a year ?

[SueDeNimes]

They have been charging £100 PA.

 

I'm minded to pay that now and then see if they have been overcharging by £10 PA after the case.

[andydd]

As per my PM it, for the years 2006-2039 the lease says ground rent is £60 per annum payable in 2 x £30

 

So if you owe 2 and half years its 2.5 x £60 = £150, have you paid £100 in previous years, if so you could claim it back.

 

Note: I was overcharged on my flat, I asked, they didnt refund so I started court action and although I was overpaying about £35 per year too much over 13 years* it all added upto over a grand when adding on court allowable 8% interest

 

* Note usual S32 limitation of 6 or 12 years doesnt apply in case of "fraud, concealment or mistake"