Hi,
I have a question relating to a clause in a leasehold document regarding interest that I am hoping someone can help me with.
I am a freeholder of a residential building. I live in the top flat with some leaseholders living in the flat below me. I am having quite significant problems with them, one of which is that they are not paying insurance/maintenance. I have advised the leaseholders in previous letters that interest will be added in accordance with the deeds, hoping it would serve as a deterrent, but this has not worked. A few days ago, I wrote to them, advising I will be pursuing it via the small claims court if I do not receive payment in 10 days, and I am slightly concerned (maybe unnecessarily) that I haven't implemented interest correctly.
I have had it confirmed by a solicitor they are breaching numerous covenants, but it would prove too costly to pursue as I have decided to sell and my flat is now on the market. I would lose all, or a good proportion, of the monies owed to me by the leaseholders if I consulted a solicitor. It would feel like I am still paying for the leaseholders if I do that. So I have tried to work out what this clause means from various sites, including on here which has been really helpful. I have pasted the clause, as it is written, below.
"To pay the rents reserved at the time and in the manner aforesaid and to pay interest:
My calculation:
My question(s):
a) Can anyone confirm if I have understood this correctly?
b) For the Lloyds Bank rate (1), I am not 100% sure if I am looking at the correct rate. The 3.83% I have seen is the Lloyds Bank 'annual interest rate (fixed)', but I am not sure if this is the same as the LB 'base lending rate' or where I can find any changes to this over the last 3 years.
c) If the 5.83% is correct, can I add this every year?
Any help on this matter would be greatly appreciated.
Thanks so much in advance, Anna
I have a question relating to a clause in a leasehold document regarding interest that I am hoping someone can help me with.
I am a freeholder of a residential building. I live in the top flat with some leaseholders living in the flat below me. I am having quite significant problems with them, one of which is that they are not paying insurance/maintenance. I have advised the leaseholders in previous letters that interest will be added in accordance with the deeds, hoping it would serve as a deterrent, but this has not worked. A few days ago, I wrote to them, advising I will be pursuing it via the small claims court if I do not receive payment in 10 days, and I am slightly concerned (maybe unnecessarily) that I haven't implemented interest correctly.
I have had it confirmed by a solicitor they are breaching numerous covenants, but it would prove too costly to pursue as I have decided to sell and my flat is now on the market. I would lose all, or a good proportion, of the monies owed to me by the leaseholders if I consulted a solicitor. It would feel like I am still paying for the leaseholders if I do that. So I have tried to work out what this clause means from various sites, including on here which has been really helpful. I have pasted the clause, as it is written, below.
"To pay the rents reserved at the time and in the manner aforesaid and to pay interest:
- at the rate of 2% per annum above Lloyds Bank base lending rate for the time being, and
- with a minimum of 10% per annum as well before as after any judgement on any rent which shall remain unpaid within 14 days of the same becoming due."
My calculation:
- I think the Lloyds Bank base lending rate was/is 3.83%, so plus 2% would be 5.83%. Therefore, 5.83% of amount owed was added at the start when it became overdue.
- 10% per annum, so I have added 0.00833% of the outstanding amount each month
My question(s):
a) Can anyone confirm if I have understood this correctly?
b) For the Lloyds Bank rate (1), I am not 100% sure if I am looking at the correct rate. The 3.83% I have seen is the Lloyds Bank 'annual interest rate (fixed)', but I am not sure if this is the same as the LB 'base lending rate' or where I can find any changes to this over the last 3 years.
c) If the 5.83% is correct, can I add this every year?
Any help on this matter would be greatly appreciated.
Thanks so much in advance, Anna
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