Late ground rent payment charge & legal fees no warnings

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    Late ground rent payment charge & legal fees no warnings

    Wonder if you can help... This week I have received a Court Claim form pack with what seems to include a ‘particulars of claim’ and ‘lease’ for ‘outstanding arrears of Ground rent and insurance’.

    Now this is a huge shock as I’ve not received any letters at all, no emails or phone calls to say this is outstanding. I have paid on time each year and have also made communications with them several times in the past (with responses to general enquiries including to also deliver / give notice via email). Payment was for 6 months ago.

    The ground rent was for 600... They are now also claiming for 550 admin fees and also 900 in contractual costs they have added costs for land registry search and additional admin fees to that too.

    I tried to call but no answer and have emailed them instantly to express my shock and confusion as to why I have not received any notice via letters, email, phone or a tap on the door given they know the address.

    Seems to me they are acting in a preditory way and exploiting any fees they can think of. Now I’ve had a look through this Lease pack and specifically there are no mentions of what fees they may collect in monetry terms but a generic speil... I did however find a clause:


    Service of notices
    A notice under this Lease must be in writing and unless the receiving party or his authorised agent acknowledges reciept is valid and only if:
    1. It is given by hand sent by registered post or recorded delivery or sent by fax.

    1. If I read that correctly, the invoice letter (which I never received nor any follow up letters) should have been sent via recorded delivery or given in hand?
    2. This is now looking like it’s going to court given the email was returned and dismissed citing that it’s out of their hands and it is to be delt with via their legal team.
    3. Contacting neighbours to get current payment and address details the rent has now been paid for the rent figure only - seems they changed their bank details hence the payment didn’t go through and only now finding out (using a holding account for bills).


    Thanks for all advice and help in advance. x



    #2


    Does your lease state that you must be insured with a certain company of the free holders choosing this is quite common. They then mark up insurance and sell it to you are a grand uplift,, you can get out of the insurance stipulation and there are forms on the internet that tell you how to do so which involves you sending them proof of your insurance (but it needs to be done in line with the renewal so you might fall fowl this year).

    If you say you have paid your ground rent then I can only assume it's your insurance stipulation. You mention "I have paid on time each year" but then you mention "3. Contacting neighbours to get current payment and address details the rent has now been paid for the rent figure only - seems they changed their bank details hence the payment didn’t go through and only now finding out (using a holding account for bills" which seems like you might have paid late? can you clarify?

    Have your been transacting with them via email and if so did they have a postal address for you? always important to keep your address on file up to date and also the service address on any land reg deeds up to date.

    These firms will do anything they can to exploit any possible penalty in the lease they are not interested in doing otherwise as it's how they make their money. They have firms of legal experts just reading the leases and working out how to exploit, an example is getting staff out looking for extensions / conservatorys etc then charging you a penalty to make it ok with the freeholder....

    If it's residential do what you can to buy out of the freehold it's the only way to get rid of them.

    Just my personal view

    All the best

    Comment


      #3
      Originally posted by KingstonBee View Post
      Service of notices
      A notice under this Lease must be in writing and unless the receiving party or his authorised agent acknowledges reciept is valid and only if:
      [/INDENT][INDENT=2]1. It is given by hand sent by registered post or recorded delivery or sent by fax.
      You will need to quote this clause in full. If the clause numbers the requirement for notices to be "given by hand sent by registered post or recorded delivery or sent by fax" I would presume that there is also at least one other numbered part to the clause - which may describe circumstances where (1) doesn't apply.

      You may also need to check all prior communications you have had with the freeholder/managing agents to confirm that (i) you have provided them with the correct postal address to which notices must be delivered (assuming that you don't live at the address to which the lease refers) and, (ii) that you haven't, perhaps inadvertently, given permission for for them to send notifications another way, for example via email.

      Since it seems likely that you will be going to court, I would suggest that you make it clear to the court that you believe that no demands for payment that were in accordance with both the terms of the lease and applicable law have been sent, and that you would need the freeholder to produce copies of the demands that they claim were not paid as well as copies of all accompanying documentation and evidence of delivery before you can provide a proper response to the freeholder's claim.

      At this stage I personally wouldn't let them know why I considered the claim to be invalid.

      Comment


        #4
        Has the freeholder changed from last year ? you can check the name of freeholder at Land Registry Online and pay £3 to download a copy of the freehold title.

        Which year did the lease start and what was the starting ground rent ? £600 ground rent seems to be rather high ?

        Comment


          #5
          Originally posted by Stew View Post

          Does your lease state that you must be insured with a certain company of the free holders choosing this is quite common.
          NO it doesn’t - We’re looking to sell before the next payment.

          Originally posted by Stew View Post

          If you say you have paid your ground rent then I can only assume it's your insurance stipulation. You mention "I have paid on time each year" but then you mention "3. Contacting neighbours to get current payment and address details the rent has now been paid for the rent figure only - seems they changed their bank details hence the payment didn’t go through and only now finding out (using a holding account for bills" which seems like you might have paid late? can you clarify?
          It was paid using the payment details that’s on my bank for standing order - It’s only now, going back into the holding account for bills does there appear to be a bounce notification a week later - At the time of payment all seemed normal. I received no letters or invoice but had to call them to ask for the payment amount as I knew it was due - they didn’t mention change of details or have ever corresponded otherwise around this. (previously I would have an invoice via letter).

          Originally posted by Stew View Post

          Have your been transacting with them via email and if so did they have a postal address for you?
          I live here and they know that, I’ve also sent emails to them over a year ago to express to send invoices and comms via email as postage isn’t always received. - They acknowledged that email and said they have no way of issuing invoices via email. (10 months prior to all of this).


          Originally posted by Macromia View Post
          You will need to quote this clause in full.
          Notices

          1. Form and service notices

          A notice under this Lease must be in writing and unless the receiving party or his authorised agent acknowledges receipt is valid if and only if:

          1.1 It is given by hand sent by registered post or recorded delivery or sent by fax provided that the confirmatory copy is given by hand or sent by registered post or recorded delivery on the same day and


          1.2 It is served-


          (a) where the recieving party is company incorporated within Great Britain at the registered office or at the Premisis
          (b) where the receiving party is the Tenant and the Tenant is not such a company, at the Premises and
          (c) where the receiving party is the Landlord or the Guarantor and the Landlord or that party is not such a company at the Landlord’s or that party’s given by the Landlord to the Tenant or that party to the other parties.




          Hope that helps! That’s the entire clause.


          Originally posted by Macromia View Post

          You may also need to check all prior communications you have had with the freeholder/managing agents (ii) that you haven't, perhaps inadvertently, given permission for for them to send notifications another way, for example via email.
          I Live here and it’s always been the same address, I did ask in Feb 2019 for all invoices to be sent via email but it was outright rejected via email.

          Originally posted by Macromia View Post

          Since it seems likely that you will be going to court, I would suggest that you make it clear to the court that you believe that no demands for payment that were in accordance with both the terms of the lease and applicable law have been sent, and that you would need the freeholder to produce copies of the demands that they claim were not paid as well as copies of all accompanying documentation and evidence of delivery before you can provide a proper response to the freeholder's claim.
          Perfect thank you, it’s what I expect to be honest, within the pack it only includes one copy of a letter (again never received) from property debt collection ltd. Which on the face of it tries to be a scary demand letter... I’m prepared to take this to court. I’ve got to sent a form to the court, should I defend the entire claim OR Part of it? I have managed to obtain their new bank details and have paid the GR and Insurance ONLY (haven’t paid their admin or excessive made up fees). Also to add, there is no mention what so ever of admin fees or late payment fees within this Lease.


          Originally posted by Gordon999 View Post
          Has the freeholder changed from last year ? Which year did the lease start and what was the starting ground rent ? £600 ground rent seems to be rather high ?
          No it hasn’t. Started 10 years ago. It actually doesn’t say anything about the GR figure - ONLY LR7. Premium (inclusive of VAT) - £1.00 (Pound) - Surely that’s an insult if it’s only that and being charged as above... PS it’s for GR and Insurance!

          Also to add, I’ve never seen this Lease agreement nor have I signed it nor is my name on it?! It states the names of others described as the Tenants - seems a generic lease as I have bought my flat.



          Cheers once again!

          Comment


            #6
            The lease clause that you quote does seem to make it clear that service charge and ground rent demands need to be in writing and delivered in one of the ways specified - unless receipt of the demand is acknowledged by the recipient (which we can assume didn't happen).
            However, the problem that you might have is that the freeholder doesn't have to prove that you saw the notice, they only have to convince the court/tribunal members that the notice was sent in one of the ways stated.


            Originally posted by KingstonBee View Post
            No it hasn’t. Started 10 years ago. It actually doesn’t say anything about the GR figure - ONLY LR7. Premium (inclusive of VAT) - £1.00 (Pound) - Surely that’s an insult if it’s only that and being charged as above... PS it’s for GR and Insurance!
            LR7 refers to the (one off) premium that was paid to the freeholder for the grant of the lease. If the premium was only £1, inclusive of VAT, and the lease is only 10 years old, this sound like an amended lease.
            It probably states somewhere that the terms of the original lease still apply unless specified, and ground rent is probably detailed there.

            Ground rent and insurance shouldn't be demanded together on the same invoice, because ground rent requires a specific format of invoice which should not include service charges - but since you say you never received any invoices it is possible that the freeholder could produce separate invoices for each of these that they say were sent at the same time.


            Originally posted by KingstonBee View Post
            Also to add, I’ve never seen this Lease agreement nor have I signed it nor is my name on it?! It states the names of others described as the Tenants - seems a generic lease as I have bought my flat.
            When you 'buy' a flat in the UK you will almost always be buying a lease, you are not buying the flat itself.
            If you used a solicitor during the purchase they should have made sure that you understood this, that you understood what the lease meant, and that you were given a copy of the lease.
            The names on a lease will be the names of the people who agreed the original lease (potentially with different names on subsequent leases/amendments). Both the freeholder (landlord) and the leaseholder (tenant) may change numerous times during the term of a lease, but the names on the lease will usually remain unchanged.

            Comment


              #7
              I think you are on a red herring with the notice issue, it sounds like you are dealing with PDC and one of the large southern freeholders who will almost certainly be able to show correct paperwork.
              You must pay ground rent on time and understand what is due when.
              Your best bet might be to argue that you had paid but they had changed bank details without informing you and so the late payment charges are unreasonable.
              If you get a reduction on them it would be a good result in my opinion

              Comment


                #8
                You should visit the Land Registry Online website and buy a copy of the leasehold title for your flat ( and post code) to download, costs £3 by credit card. Check the property is registered under your name.

                The lease remains in the name of the first leaseholders.You can buy a copy of your lease from Land Registry for about £25 (by written request). The lease will state how much annual ground rent is payable.

                Comment


                  #9
                  Section20z,

                  Well for starters the lease is written as if it’s for a rental and not a purchased flat, does this have any difference?


                  I understand that fully, and I have done and my intentions were clear, I was not to know they changed their bank details and so my actions to pat when I did (on time) were honest. I’m not going to intentionally not pay to rack up fees etc so surely that can be argued?

                  A reduction of what sorry? Solicitor fees, admin fees etc or all? It still feels incredibly unfair they’ve not made any effort to sort this asap and they’ve purposely let it get to this, surely they have some sort of duty to protect their losses in way of racking up their own admin fees by sending out letters that doesn’t exist. We get other mail fine from usual bills.

                  Makes me so angry and upset!

                  Comment


                    #10
                    Originally posted by KingstonBee View Post

                    Well for starters the lease is written as if it’s for a rental and not a purchased flat, does this have any difference?
                    There is no major difference between a lease for a short term rental and the long lease that is purchased when someone "buys" a flat, other than the length of the term that will be stated on the lease.
                    In fact, if you decided to rent out your flat as a short term rental property, you would be expected to ensure that the person(s) you rented to would be bound by all of the terms of the long lease, in addition to any additional restrictions that you wanted to add, other than the requirements of the long lease than you would retain responsibility for yourself (e.g. ground rent and service charges).

                    Again, flats in the UK are usually NOT "purchased", what you "buy" is a long term lease - so you are buying a rental, it's just that it is a long term rental that typically has a relatively low annual rental fee payable.

                    Comment


                      #11
                      KingstonBee,

                      I quite understand your anger but many freeholders are just out to milk you for all they can, all you can do is try and minimise that and maybe negotiate out of the late charges. Unfortunately they have appointed PDC to collect the arrears and their only payment is what they can lever out of you.
                      It may be they are entitled to nothing but that could be a long fight.

                      And a lease is only a long term rental. The only way to avoid these issues is to sell the flat, buy the freehold or form an RTM to take over the management.

                      Comment


                        #12
                        I would be upset too, that is why they are trying to reform these practices, they actually want you to be late or fail to pay as they make additional revenue this way. They buy up parcels of freeholds cheap and then try and extract what they can from the leaseholders.

                        If you have the money to pay it I would pay it and then take them to small claims court. I think you will struggle to sell if you don't pay it as the buyers sol will want to see an account of the payments made. These debt firms add on so much for each visit it's just not worth letting it get that far...

                        Others will advise better but I'm not sure on the sequence of events and if they have to take it to court or if they can pass the debt onto a collection team where it's effectively a breach of the lease agreement.

                        That said I think the lease has to specify fines/penalties and if not they have to be reasonable, if you have any house hold legal insurance I would ask them to help you.

                        Just my personal view

                        All the best

                        Comment


                          #13
                          With regard to reduction in payment, you should be arguing that only the amount that that lease states is due for ground rent, and the share of the insurance that the lease says you are required to pay are due - and that these are both only due after they have been properly demanded in accordance with both the terms of the lease and applicable leasehold legislation.

                          If you say that you did not receive any demands for payment, you should argue that the freeholder first has to provide evidence that correct demands were sent out (if they can't do this, it supports your claim that they weren't sent, which would mean nothing is payable, including the ground rent and insurance).

                          If the freeholder (or their solicitors) produces copies of demands that they say were sent, these need to be correct - or again nothing is payable.

                          If valid demands are produced, along with evidence that supports the claim that they were sent out correctly, your argument would be that you didn't receive them, and that the freeholder has a duty to limit costs incurred in chasing the debt (i.e. they should first have sent out reminder letters and/or emails rather than engaging the services of a debt collector). In this case you should say that you are willing to pay reasonable costs.

                          If it seems likely that the freeholder will produce sufficiently convincing evidence that both correct demands and reminders were sent out (whether they were or not) it is likely to be worth trying to negotiate whatever small reduction in costs you can instead of going to court, because the costs that you are likely to be expected to pay will increase if you go to a court hearing and lose.

                          Comment


                            #14
                            Section20z,

                            Ok, so they’ve said that I should only be now talking with PDC “it’s now in the hands of them sorry!” - Do I negotiate with the original Lease Holder OR PDC? Also are the costs fixed as per the claim amount on the court paper?

                            Stew,

                            How much is reasonable? And is this an offer on the legal fees too or JUST the admin for the lease and maybe a late payment fee?

                            It absolutely doesn’t hence why this is also unfair that they are claiming what they want!

                            Macromia,

                            Well, they haven’t included any evidence in their court pack other than a PDC letter (again that was never received).

                            Do you have a template I can use to argue these points please? and to whom?

                            The fees on the court paper already includes legal fees, can these actually increase now?!


                            Thank you x

                            Comment


                              #15
                              Hi, just wanted to say that I had a similar experience, I received my demands but they were not in accordance with my lease demanding some costs at 100% instead of 50%.
                              MA instructed PDC which lead to court proceedings. In total MA wanted £13,000 plus £3,000 for PDC solicitors. Yes your solicitor bill from them will increase last minute just before the day of your court hearing. Think in my original court pack it was around £800, in the papers before court it had increased to over £3,000.
                              Before you go to court you are advised mediation which we both agreed to but on the day surprise surprise no one answered at PDC.

                              PDC sent a barrister to attend the court hearing. I won on all my points I had spent years arguing with the MA over but I still had to pay half solicitors cost because the barrister lied in court. If they are on a no win no fee that should be declared in court before proceedings, they were on a no win no fee but the barrister lied when the judge was dealing with the solicitor cost because he last minute discovered that he hadn’t put in a claim for his fees for the day which would have added another couple of thousands. As I couldn’t prove they were on a no win no fee, and the judge was uninterested, I was made to pay half. (Freeholder has since confirmed they payed no fee and the case was on a no win no fee)
                              Of the £13,000 I was ordered to pay £7,000 plus £1,500 for fees.

                              County court has jurisdiction to deal with these cases but they are only interested in settling the claim. The judge really didn’t want to deal with it as it should be dealt with in the Property Tribunal which she stated at the beginning but the barrister argued that the court had jurisdiction.
                              My advice, and I wish I had done this, in the court papers you can ask to have the case referred to the Property Tribunal. I believe that the Tribunal read through all the paperwork and will look into the case more than the court. The judge didn’t care about section 20C notices or if the demands were correct. Tribunal will read through everything and also costs have to be reasonable and in accordance with your lease.

                              I believe PDC are intimidating and they rely on the court not wanting to deal with these cases properly, just reach a quick settlement. This is just my experience, others might disagree but I have been to court and to Property Tribunal and I felt the Tribunal was better in terms of going through the paperwork and reasonable costs in terms of your lease. I just wanted to share my experience so you know a bit of what to expect. Macromias advise is really good, you are now responding with your defence to the court if you have already been served court papers. Good luck I know how stressful it is.

                              Comment

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