Service charge ground rent late payment - Admin charge and legal fees

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    Service charge ground rent late payment - Admin charge and legal fees

    Hello All,

    I have a leasehold flat and have missed paying the ground rent and service charge.I wont go into the details why I missed it but have learnt a lesson that I should have been paid on time. I received an email from the Landlords solicitor demanding the money be paid to them directly including admin & legal charges. Thing is I had already paid the service charge to the managing on the morning of the day when I got the solicitors email, I had also tried to pay the ground rent however my account was blocked by the company so couldn't pay. I emailed the solicitors explaining my situation and that I have already paid the service charge to the managing agent company directly. To this they replied that they have instructed the managing company to return the money and for me to pay the solicitors directly. I need advice with two and would be grateful if you all could please spare few moments of your time to reply.Thanks.

    1. I'm yet to receive a refund of the service charge that I have paid directly to the managing agent,should I go ahead a pay the solicitors again or wait for the refund.
    2. My service charge is £898 and ground rent is £125,the solicitor is demanding £1554 which includes legal costs £336 and £75 admin charge for ground rent & £120 service charge.They are charging me 50% of what I originally owed as legal costs/admin fees. Is this reasonable? I have already requested solicitor to reconsider to which they have refused. Do I have any option other than pay up what they have demanded.


    Thank you

    #2
    If you have paid the service charge as requested, there is no reason for the payment to be refunded or for you to pay it again to the solicitors or anyone else.
    Whether or not legal costs can be charged to you depends on the wording of the lease. If the solicitor has done nothing other than issue a standard letter, the charge is unreasonable.
    If you have not paid the ground rent, I would pay the freeholder or his agent, not the solicitor, You should issue a cheque with ground rent 2019 written on the back and send it with a covering letter stating that it may not be accepted for any other purpose.
    You should check that the proper notices were included with the demands for payment.

    Comment


      #3
      Thank you eagle2 . I'm attaching the screenshot of the email, it mentions if I don't pay them directly they'll take legal action. Can they still take me court as I paid the managing agent and not them. I'm reading the lease to check for mentions of legal fees.Thanks.

      Thank you
      Attached Files

      Comment


        #4
        They cannot take legal action in respect of service charges if you have already paid them. The ground rent should be paid as stated previously, do not pay the solicitors because they are likely to deduct the payment from their charges. It then depends on the wording of your lease whether or not any charges are payable. If they are payable, you can challenge the reasonableness of the charges. It is important to pay everything except the charges in the normal manner. If they return your cheque, that works in your favour.

        Comment


          #5
          Many thanks for your time and response eagle2 . I'll post what I find in the lease. Should I let the solicitors know that I'm paying the ground rent and I cannot pay he service charge to them as I have l already paid it. In fact I have paid £248 extra to the managing agent as the original service was for £1146 which was later year end adjusted to £898.Thanks.

          Thank you

          Comment


            #6
            I would have no contact with the solicitors, otherwise that gives them an excuse to charge, If you have paid £1,146, that is more than what you owe including the ground rent and I would wait to see whether or not your payment is returned. They seem to have no grounds for threatening legal action or imposing charges,

            Comment


              #7
              The managing agent has been told not to accept payments. That means that they are in forfeiture mode. Their ability to recover legal costs will be based on the recovery process being preparatory to forfeiture. At the point at which the payment was sufficiently overdue for a breach to exist, that became possible. If you take it to the FTT, I expect them to counter with a request for a ruling that you are in breach.

              Refusing to accept payment is a standard practice, in order to be able recover legal costs, so I can't see the FTT saying they had to accept payment.

              Note that it is most unlikely that the lease will be forfeited, but without going through the motions, they won't be able to recover their costs.

              Comment


                #8
                Whether or not the correct notices were included with the original invoices may help with arguing against the additional charges - but only if the correct notices weren't sent.
                Did you receive demands for payment and reminder letters? If so, did they include the correct notices/information (statement of leaseholder's rights and obligations, ground rent demand in correct format)?

                Comment


                  #9
                  It would be extremely unwise of the managing agent to refuse to accept a cheque which more than covers the debt before the solicitor became involved. I doubt very much if the payment will be returned, just wait and see. There is no chance of forfeiture and unless the lease allows you to be charged for legal fees and administration fees, nothing is payable. You may need to apply to the FTT otherwise the charges may remain on your account.

                  Comment


                    #10
                    Thank you leaseholder64 I know I should have paid but now that I have paid the managing agent directly and the solicitor is telling me it will be refunded and I should pay them directly. I would be paying twice if I pay them now as I haven't received the refund yet. Also I think £500 (almost 50% of my charge) is not reasonable amount legal plus admin fee, though I admit I may be wrong as I have no clue what a reasonable amount is. I was hoping they would agree to a smaller number maybe half and put this to close but they haven't. Is FTT a court or is court different? Will I get a CCJ if they take me to court ? Thanks.

                    Thank you

                    Comment


                      #11
                      Thank you Macromia Yes they had sent reminder. Its my mistake that I failed to pay on , I got distracted with things that were going in my life and needed my attention. Its not excuse,lesson learnt but unfortunately can't change whats happened.Thanks.

                      Thank you

                      Comment


                        #12
                        Thank you eagle2 Can I apply to FTT now or I have to wait for either the managing agent or the solicitor to reply.Thanks.

                        Thank you

                        Comment


                          #13
                          I found the following in my lease,I do not know if this means that managing agent can charge but to what extent. Please can you folks advice.Thanks.

                          Thank you
                          Attached Files

                          Comment


                            #14
                            6 (b) means that you can be expected to pay interest (at 4% above what Barclay's base rate has been for the period between when the service charges/ground rent were originally due and when they would have received your cheque).

                            11 (a) is the only relevant part of your lease that you have provided, and can only be used to recover legal costs if they can make a reasonable case for pursuing forfeiture.

                            Were the service charge demands that you received accompanied by a correct 'summary of tenant's rights and obligations', and was the ground rent demand in the correct format and with all the correct information (freeholders address, etc.)?

                            If the demands weren't correct then nothing was due and there is no way that they can claim interest or legal fees - even though the lease states that these don't need to be formally demanded.

                            It is too early to be applying to the FTT at the moment - you first need to try and get the matter sorted out, and the legal charges dismissed, via communication with the managing agent/freeholder.
                            Applying to the FTT will cost you money while you might be able to get the charges dropped without an application.

                            Comment


                              #15
                              11a is why they cannot accept your payment. If they accept your payment they waive your breach of the lease, and are therefore unable to recover their enforcement costs from you.

                              6a is why you are in breach. The breach is having the debt at the 21 day point, not just having the debt.

                              In spite of what others are saying, the standard advice if you expect to recover costs form an errant leaseholder is to do nothing that acknowledges that there is still a lease. That includes making further demands, but also includes accepting any payments.

                              You need to separate the debt from the breach of the lease. Note that many buy to let landlords would love an easy way of evicting their tenants if they were 21 days late with the rent, whether or not they eventually paid.

                              I'd suggest booking an appointment with the CAB. I'm not sure I'd suggest paying a solicitor for advice, as I imagine they would charge something similar to the amount you are disputing.

                              Comment

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