£390 Overdue Charges on £50 Ground Rent Balance

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    #16
    J-T,

    Please note that I have made a slight change to the wording.

    There is no need to add about the summary of rights as it is not applicable since no charges are payable. Referring to it could be taken to imply that you accept some charges are payable. There are three rules when engaging in legal correspondence which will help avoid giving a hostage to fortune:

    Rule 1: Do not say more then you absolutely need to.
    Rule 2: Remember Rule 1
    Rule 3: Do not forget Rule 2

    Comment


      #17
      Duly noted and thankyou for you input, apologies, I missed your previous response before posting. I will omit the comments regarding the summary of rights

      Would it be advisable to ask them upon which clause they are relying in applying the charges? I only ask as I would be concerned that simply stating that the lease does not allow for admin charges and stating that I am not paying them would simply lead to them ignoring the letter and no further action being taken on their part and thus it continues unresolved, or would this work in my favour should things progress to FTT?

      Comment


        #18
        Originally posted by J-T View Post
        Would it be advisable to ask them upon which clause they are relying in applying the charges?
        Not at this stage. You simply boldly assert that the lease make no provision for charges. That puts the onus on them to check the lease - I would a penny to a pound they have never read it to see what the position is. If they came back and say it does but do not quote any clause you respond by asking which clause they are referring to. If they refer to the clause you quoted you come back here letting us know what they said and we take it from there.

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          #19
          Ok, that makes sense. Thanks again, I will update when I receive a reply.

          Comment


            #20
            I would emphasise that the cheque must not be accepted for any other purpose, I agree that the freeholder should accept it as stated but I have known some to ignore clear instructions. .If the administration charges are not withdrawn, I would urge you to apply to the FTT to determine that they are unreasonable, It is unfortunate that other leaseholders pay these charges for a quiet life which only encourages freeholders to continue making unreasonable charges. I would not waste time pursuing the complaints procedure, it usually results in a long delay followed by a statement that the ombudsman is unable to intervene in matters which may be resolved by a court or a tribunal.

            Comment


              #21
              Originally posted by eagle2 View Post
              If the administration charges are not withdrawn, I would urge you to apply to the FTT to determine that they are unreasonable
              Change "unreasonable" to "not payable".

              (Subject to confirmation by a litigator you would in fact plead: (a) the charges are not payable (b) if they are payable they are unreasonable.)

              Comment


                #22
                Lawcruncher and I are saying the same thing, the charges are unreasonable because they are not payable under the terms of the lease and the amounts are excessive if they were payable. The FTT makes allowances for claims brought by laypersons such as you and me. Before proceeding to the FTT though, you should still consider making an offer to settle the case. It is unlikely to be accepted but it will protect you in case the FTT considers that you were partially to blame for not advising your correspondence address.

                Comment


                  #23
                  Originally posted by eagle2 View Post
                  Before proceeding to the FTT though, you should still consider making an offer to settle the case. It is unlikely to be accepted but it will protect you in case the FTT considers that you were partially to blame for not advising your correspondence address.
                  I think not. The fact that the OP did not give the landlord/agent his correct address is irrelevant. The point is that nothing is owed because there is no right to make a charge.

                  Comment


                    #24
                    As Section20z pointed out, the FTT can decide to act as arbitrators rather than apply a strict legal ruling when determining what is payable and what is not. If I were going to the FTT, I would rather demonstrate that I had acted reasonably and offered to settle the matter instead of refusing to pay anything at all.

                    Comment


                      #25
                      Thankyou both. The letter is being posted tomorrow. I will inform once I receive a reply.

                      Comment


                        #26
                        The managing agent have replied with the following:

                        My £50 cheque has been returned and deemed unacceptable.

                        They have confirmed that payment requests were sent to the registered property on 5 occasions and provide dates. I'll provide the rest in full:

                        "As you may already be aware, it is the responsibility of the registered Leaseholder of the property to ensure that payment for ground rent is made by the due dates stipulated in the lease. Failure to do so is a breach of your lease, and administration fees can incur as a result.

                        We have the right to recover the administration costs that are incurred through our process of attempting to recover ground rent arrears. After a certain point we feel that it is justified to pass a portion of these costs onto the Leaseholder in the form of collection costs.

                        However, on this occasion we are prepared to reduce the collection cost fees as a gesture of goodwill and in order to assist you in settling your account. Please find enclosed an updated payment request for your reference."

                        The payment request then reduces the ground rent collection costs to £156 (made up of 2 x £78 collection costs), plus the £50 Ground Rent arrears, totalling £206, down from £440.


                        My initial thoughts upon reading this is that they have realised that they do not have authority to collect these charges according to the lease and are chancing their arm to at least recover something from me - "we feel it is justified".

                        Interested to hear other opinions.

                        The only possible fly in the ointment here, is that as I previously explained, I am in the process of re-mortgaing the property (which is taking forever, but that's a different tale!). I remember there being a question about who the managing agent was and whether the ground rent account was up to date in their pack that I had to return to the lender. I replied yes, as I intended to bring it up to date, which is how this whole situation came about. Clearly, if the lender performs their own checks with the managing agent, the lender will be informed that the account is in arrears which I am sure will prevent drawdown. Are they likely to check? As much as it pains me, I may just have to pay, but at least it is now much reduced. However, up to now, this has not ocurred.

                        Comment


                          #27
                          In your position I would pay the reduced amount which is more reasonable, only because you are remortgaging and arrears could result in the withdrawal of the mortgage offer, particularly as you have not been transparent in your response to their enquiry.

                          Make sure the land registry has your home address on the register and not the property address as a contact. Two reasons, the freeholder would have had an alternative address to write to as would other people needing to contact you, but more importantly as a fraud prevention.

                          Comment


                            #28
                            Please await my comments which will include a draft reply.

                            Comment


                              #29
                              Do not give these people money they are not entitled to, Think what use you could make of £156. I for one would rather give it to charity. The legal points involved are set out in the following draft letter. If feeling conciliatory you can save the last two paragraphs for the future if they come back again, though given that you are remortgaging I would be inclined to include the last as a pre-emptive measure:

                              *

                              Thank you for your letter of […] upon which I have taken advice from a landlord and tenant specialist lawyer.

                              There is no rule of law which allows a creditor to charge for credit control. For any such charge to be levied there must be prior agreement. The lease makes no provision for administrative charges to be levied. Your reward for collecting rent is the commission you charge the landlord. Commission is results based. It can be a matter of swings and roundabouts so that more work may be required in one case than another. There is no entitlement to any extra payment simply because a particular case requires more involvement.

                              My cheque for £50 to be applied to rent owing is returned. There is no justification for declining to accept it. Whilst of no relevance in this case since no charges are due, if money is owed on two accounts and a sum is tendered in respect of one, acceptance of the amount tendered cannot be declined on the grounds that the other account remains unpaid. If payment is declined on such grounds the right to sue for it is lost.

                              If further demands for payment of charges are made I shall, without notice, start proceedings under section 3 of the Protection from Harassment Act 1997 on the grounds that payment is being demanded for sums to which you are not entitled.

                              Finally, if you inform any third party that the rent and/or any charges in respect of rent are outstanding I shall, without notice, sue for slander of title.

                              Comment


                                #30
                                Thankyou, I thought as much.

                                I'm just going to have a word with my mortgage advisor and see how much of an issue it could be. I shall update shortly.

                                Comment

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