Sale of flat - breach of lease

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    Sale of flat - breach of lease

    Hi

    The flat below me has been repossessed by the mortgage company and is now up for sale.

    As director of the RTM company I have received a letter from the mortgage company's solicitors asking me to complete their questionnaire.

    The lessee is in considerable arrears with the service charges which we want to be paid upon completion and I plan to tell them that.

    I have also viewed the property with the estate agent (with the thought of buying it, but they are asking too much) and found that that the outgoing tenant removed all the carpets in the living room and bedroom, which will make it noisy for me in the flat above and is a breach of the lease.

    I am not sure whether to mention this breach in the questionnaire. Can I mention it and insist that they sort it out along with the outstanding funds before completion or let it ride as I am more concerned about getting the money out of them. I believe that if I accept the service charge money after mentioning the unfixed carpet breach, then the right to forfeiture is waved, along with our leverage over the situation. Is that correct?

    They don't know that I am aware, yet.

    Or should I wait and take it up with the new owner if they don't fit new carpets in a timely fashion and start being noisy?

    Myself and another flat owner are buying the freehold of the building and that is due to complete in about 2 weeks time. so our freehold company will take over from the RTM.

    If I do pursue the carpet issue, should I write to the lessee also and inform them of their breach of lease?


    thanks!

    Rob

    #2
    Failing to mention it on the LPE1 responses may make it difficult or impossible to enforce it in future.

    Accepting the service charge may accept the breach.

    Although too late now, lenders will normally pay for defaulted service charges (and add them to the loan) to avoid action to forfeit the lease, so you should have escalated to them as soon as the payment was defaulted. It might have brought the re-possession forward, of course.

    Comment


      #3
      Is it not simply a case of demanding the mortgage companion (who I presume is in effect the new 'owner') pay any outstanding charges before responding to them on any other matter ?
      (I ask out of ignorance and not trying to advise)

      Comment


        #4
        Thanks.
        Yes, I did write to the mortgage company who said they would want it confirmed by the tribunal that the charges were owed. As the repossession was in progress I thought it best to just to wait until they sold and then paid the outstanding charges due rather than the tribunal rigmarole.

        So should I insist they accept the carpet breach and pay the charges?

        Comment


          #5
          Does the lease require the freeholders consent to transfer?

          Have the outstanding charges been correctly demanded?

          How is the flat being sold, auction or via agents?

          I would write to the mortgage co and say you are unable to respond to any requests until the carpet breach is remedied and the outstanding charges are settled, its for them or the new owner to contest at tribunal.

          I’d then inform whoever is marketing the flat about the breach and outstanding charges so they then inform any potential buyer.

          Comment


            #6
            I would try to post a notice to the Land Registry Record for this property to say there is no sale until the service charge arrears are paid and breach of lease rectified.

            Comment


              #7
              Thanks

              Does the lease require the freeholders consent to transfer?

              It doesn't mention consent, but there is a fee payable for the Notice of Assignment.

              Have the outstanding charges been correctly demanded?

              I believe so. But perhaps not. I have noticed I made a mistake on the total arrears brought forward on their last two service charge notices. Whoops. Although the amounts showing for each service charge period are correct and I believe the service charge notices are otherwise correct and in accordance with the requirements. Perhaps I can reissue them? Maybe I do not need to?

              How is the flat being sold, auction or via agents?

              Via agents


              I would imagine that a buyer's solicitor would advise their client against purchasing the property with these problems outstanding and would want them resolved?

              thanks again.





              Comment


                #8
                Originally posted by Robble76 View Post
                Thanks

                I would imagine that a buyer's solicitor would advise their client against purchasing the property with these problems outstanding and would want them resolved?
                Yes, I think you can probably sit tight until a buyer sends the LPE 1 form, you can then raise the breach and outstanding service charges, their solicitor will insist it’s resolved before proceeding.

                Comment


                  #9
                  thanks, I have a form from the mortgage company's solicitor. It is not LPE 1, but their own version I guess.

                  Comment


                    #10
                    Just to follow up on this. The mortgage company have coughed up in full for the service charges so we are happy.
                    I think it Is best for RTM companies to have the RTM noted on the freehold title at the Land Registry as this is how the mortgage company found out about us.

                    Thanks for your comments.

                    Rob

                    Comment


                      #11
                      Originally posted by Robble76 View Post
                      I think it Is best for RTM companies to have the RTM noted on the freehold title at the Land Registry as this is how the mortgage company found out about us.

                      Thanks for your comments.

                      Rob
                      I agree but so many RTM Companies do not do this which results in third parties sending important and potentially life altering communications to the freeholder. As your freeholder is not being paid to reply to or forward third party communications, he may choose to file them in a waste-bin ...

                      Comment

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