Outstanding Service Charges - What to do when the leaseholder dies?

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    Outstanding Service Charges - What to do when the leaseholder dies?

    Hi,
    I have done a bit of research, but I am still not sure where it is best to start so hoping for a few pointers with outstanding service charges.

    I'm a freeholder of a converted house. I recently sent a letter of claim to the leaseholder for non-payment of service charges, advising him that if I didn't receive payment or an alternative proposal, etc., I would regrettably have to go down the small claims route. The deadline for a response from the leaseholder was yesterday and so my application was all ready to go (this is after 2.5 years and several letters/invoices). However, although I have not been, and probably won't be, informed of this officially, the leaseholder has apparently passed away.

    The leaseholder and his family do not understand they are leaseholders and there has been a significant number of breaches, v. abusive language, and the remaining 2 residents, one of whom I believe will purchase the flat, are probably worse in terms of their behaviour.

    I am trying to sell my flat, mainly because of the problems I have had with them. If I have to see a solicitor it would probably wipe out everything I am owed so I am trying to avoid it, if at all possible.

    My questions:
    1. Given their flat is a leasehold, would their solicitor, for probate or property matters, check outstanding debts with the freeholder as a matter of course?
    2. What steps do I need to take to recoup the outstanding service charges?
    3. Should I still go ahead with the small claims application, given I have not been told of his death?
    Thanks for any help you are able to give.
    Regards,
    Anna

    #2
    If you know the solicitor or executor, I suggest that you contact them and advise them of the arrears, They will have to be paid by whoever becomes the new leaseholder. There is not much point in pursuing a county court claim against a deceased person.

    Comment


      #3
      Originally posted by eagle2 View Post
      If you know the solicitor or executor, I suggest that you contact them and advise them of the arrears, They will have to be paid by whoever becomes the new leaseholder. There is not much point in pursuing a county court claim against a deceased person.
      The new owner would not be responsible for the outstanding service charges. Any action would be against the estate and on the information given bound to be successful providing there is money and there appears to be a property here. I would firstly check the land registry to see if there is a mortgage. If there is, inform the mortgage company of the position. Find out who the executors are as if they fail to clear debts are in breach of their fiduciary duty. Failing that, issue a claim against the executors. You can of course once you have a successful money claim, apply for an interim charging order.

      Also if you see a for sale board going up, inform the estate agent there are monies outstanding and ask for the details of the solicitor dealing with the sale, or get them to pass a letter on, informing there are outstanding monies due. The property should not be conveyed with service charges owing and if it is the solicitor has not carried out proper enquiries.

      Ultimately the property could be subject to forfeiture proceedings by the freeholder even once conveyed.

      This is a very useful article setting out the position. https://www.bradysolicitors.com/brad...e-charge-debt/

      So 1. Yes they should but some conveyancers are better than others.
      2. As above.
      3. Yes but you must add the executors to the claim.

      Comment


        #4
        Originally posted by eagle2 View Post
        If you know the solicitor or executor, I suggest that you contact them and advise them of the arrears, They will have to be paid by whoever becomes the new leaseholder. There is not much point in pursuing a county court claim against a deceased person.
        Yeah..would be a shock if he turned up
        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

        I do not accept any liability to you in relation to the advice given.

        It is always recommended you seek further advice from a solicitor or legal expert.

        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

        Comment


          #5
          Thanks to each of you for your help. I had thought that perhaps there would be a process for the executor to follow with the small claims court in the event of someone passing away rather than obviously pursuing with a deceased person. Jon66, thanks for the article, really helpful, and for all your advice. Thanks, Anna

          Comment


            #6
            In practice what will happen is that the solicitors dealing with the estate will write to you for confirmation that no money is due under the lease, and they will pay you because a buyer will want to take the flat clear of arrears.

            Comment


              #7
              All debts have to be paid before the estate is distributed. The worry for you is who is the executor. If it's a non-professional, they may not know this. However if the flat is to change hands they will have to notify you as the freeholder as you will be asked for an information pack and confirmation of the service charge payments. Looks to me as this could just drift so you need to find out who is dealing with the affairs.

              You will have to claim against the estate now and will have to wait for probate which might be lengthy.

              Comment

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