Advice for CCJ dispute over ground rent payments

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Advice for CCJ dispute over ground rent payments

    Advance warning: this is going to be a lengthy post – but I really would appreciate advice from anyone who might be able to help ..

    For background: in 2017, I (along with 3 friends), purchased a leasehold property with the intention of renovating it and selling it on (the “investment property”). However, after a series of unfortunate events, myself and one of the other co-owners fell out with the other two co-owners, and the flat has sat empty ever since.

    According to the terms of our lease, we must collectively pay £300 ground rent every year. We paid ground rent in 2017 as part of the purchase; we were issued with an invoice in 2018 for that year’s ground rent – which was paid promptly. However, after 2018, we did not receive any further ground rent invoices and - as the property had been ‘mothballed’ due to the conflict between owners - it was not something any of us remembered to enquire about.

    Then, out of nowhere, in July 2020, I received a CCJ ‘Judgment for Claimant’ notice sent to my residential address. After some investigation, I discovered that the ‘Claim Form’ (which would have given me an opportunity to dispute the charges) had been sent to my attention at the investment property address – but I have never lived there, and had not visited the property in several months, due to the pandemic. One of the other co-owners, who I am in dispute with, had the same thing happen to him.

    The total amount being claimed was £2,490. The CCJ Particulars of Claim amounted to £990 plus £500 legal fees for recovery of arrears. The £990 supposedly comprised of unpaid ground rent for 2018, 2019 and 2020 (3x £300 = £900) plus court fee (£60), with no mention of what the other £30 was for. There were also interest charges “at the rate of 8% pa from 1 January 2018 to 29 June 2020 on £900 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £30.”

    Had we been sent invoices for the 2019 or 2020 ground rent, then they would have been paid. But they were never sent. The 2018 ground rent had already been paid; with acknowledgement from the freeholder’s representative at the time, but he had tried to claim that it was still outstanding for the CCJ.

    Despite the blatant unfairness of the situation, we decided that rather than risk a CCJ being issued against us, it was better to just pay and make the situation go away. We told the freeholder that they had already acknowledged receipt of £300 ground rent for 2018, and they agreed to reduce the amount owed by £300, but would not budge on reducing the interest – even though it had been applied from 1 January 2018 instead of 1 January 2019.

    When we asked the freeholder why the charges being imposed were so high, he said this was to cover the legal fees he had incurred to recover the outstanding debt – which I believe to be complete nonsense. He had never so much as sent an invoice, let alone had anyone in any legal capacity contact us about the debt.

    I believe it was a deliberate act to get the court to send the Claim Form to the investment property address; he knew it would not be seen in time, and we would have no opportunity to respond to the claim. Conveniently, he remembered to provide the court with my residential (correspondence) address when it came time to issue the CCJ.

    Having mulled it over, I decided that I ought to fight back. As a result, I lodged a money claim against the freeholder to recoup the money that was unjustly demanded from me. I initially agreed to a mediation session, but that was unsuccessful and now we are moving to a court hearing next week.

    My case is that I should not be liable to pay any interest or legal fees on any of the ground rent amounts: 2018 ground rent was already paid at the time, and I never received invoices for 2019 or 2020 ground rent. All that should be due is 2019 and 2020 ground rent, with no associated extra costs.

    A CCJ was issued against me without the freeholder following proper procedure and protocol. And in their doing so, I was denied an opportunity to pay the actual ground rents that were due for 2019 and 2020, and instead had to pay a significantly inflated sum.

    Although the freeholder had knowledge of my residential (correspondence) address, no invoices relating to ground rent for 2019 or 2020 were ever sent to me at that address. Instead, the freeholder has asserted that the invoices were sent to the investment property – but in my visits there, I have never come across a single invoice relating to ground rent.

    My court date is fast approaching, and I would really appreciate any advice on my case and how to structure any responses, etc.

    Thank you so much!!

    #2
    The old law is that rent is payable whether or not formally demanded. No invoice is such is required. There is however now an obligation to issue a s166 notice for the ground rent to be payable. It would probably have been good service for the landlord to have sent it to the property particularly if this was the address the land registry has for the proprietors. You do have a defence in part because you say that you paid 2018. Interest is payable at 8% on county court debts as from the date due. The court will probably be sympathetic to you.

    Comment


      #3
      Does your lease refer to Section 196 of the Law of Property Act 1925 ? - if it does, then service is effective if the proceedings are served at the property address.

      How on earth does an interest charge of £30 per day get to be applied - the statutory rate is 8% per annum - can you give a breakdown of the £2,490

      Comment


        #4
        You haven’t stated exactly how much you paid.
        You can argue that you did not receive demands and s166 notices therefore the ground rent was not payable until they were issued. You can expect the freeholder to state that they were issued to you to which you can reply that one may be lost in the post, two is too much of a coincidence.
        You can argue that the legal costs are unreasonable, payment would have been made if the demands and notices had been received, therefore it was unnecessary to issue a summons. Warning of legal action should have been given to you prior to the summons being issued. £500 legal fees appears to be unreasonable in any event.
        As stated in #3, the interest charge seems to be incorrect, the freeholder is only entitled to charge interest from the due dates once valid demands and notices have been issued, so no interest is payable. The calculation appears to be incorrect, 8% on £2,490 is £199.20 per annum or £0.54 per day.

        Comment


          #5
          We paid the full amount that was demanded on the Judgment for Claimant (£2,490) MINUS the £300 that we had already paid for 2018 ground rent. So £2,190 in total.

          Thank you for your advice regarding how we can argue this. I have been instructed to submit a bundle ahead of the court hearing, so I will be sure to include all these points.

          I agree that the interest appears to be incorrect, and it is incredibly frustrating that we were not given a proper breakdown of how this was being applied. At the time, we felt we had no choice but to pay in order to avoid CCJs being issued, but I really want to contest this and try to at least reclaim some of our money.

          Thank you for your help.

          Comment


            #6
            sgclacy,

            Yes, the lease states, “Section 196 of the Law of Property Act 1925 shall otherwise apply to notices given under this lease.”

            The interest rates sound ludicrous to me. The exact wording on the Particulars of Claim about interest charges is “at the rate of 8% pa from 1 January 2018 to 29 June 2020 on £900 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £30.”

            The CCJ Particulars of Claim amounted to £990 PLUS £500 legal fees - for recovery of arrears. The £990 supposedly comprised of unpaid ground rent for 2018, 2019 and 2020 (3x £300 = £900) plus court fee (£60), with no mention of what the other £30 was for.

            The Judgment for Claimant was issued saying the total amount owed was £2,490 - but there was no breakdown. When we asked the freeholder why the charges being imposed were so high, he said this was to cover the legal fees he had incurred to recover the outstanding debt.

            Comment


              #7
              flyingfreehold,

              We have never received any S166 notices.

              Ground rent was paid for 2017 and 2018, and we have already paid for 2021 - because invoices for all were received and duly paid. We would not deliberately avoid payment.

              We are hopeful that the courts will be sympathetic. If you can suggest anything that should be included in our bundle, please kindly let me know.

              Thank you for your help.

              Comment


                #8
                If it was served at the property address even though they knew you did not live there is deemed to be properly served Van Haarlam v Kasner a notice was held to be properly served even though the landlord knew the tenant was in prison

                To quote from Section 196 of the Law and Property Act 1925

                (3) Any notice required or authorised by this Act to be served shall be sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the lessee, lessor, mortgagee, mortgagor, or other person to be served, or, in case of a notice required or authorised to be served on a lessee or mortgagor, is affixed or left for him on the land or any house or building comprised in the lease or mortgage, or, in case of a mining lease, is left for the lessee at the office or counting-house of the mine.

                (4) Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor, or other person to be served, by name, at the aforesaid place of abode or business, office, or counting-house, and if that letter is not returned by the postal operator (within the meaning of Part 3 of the Postal Services Act 2011) concerned undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.


                When making payment did you make it clear it was being paid "under protest". If not then I would take professional advice before going any further. There may be an issue with the matter now being treated as res judicata.


                Comment


                  #9
                  Thank you for your advice. When making the payment, although we did not use the terminology "under protest", we did state the following: "However, just to let you know, XX and I feel that this matter has been handled unfairly so we will be seeking advice about how to recoup our costs."

                  Do you think this wording will suffice?

                  Comment


                    #10
                    Originally posted by Charlotte163 View Post

                    When making the payment, although we did not use the terminology "under protest", we did state the following: "However, just to let you know, XX and I feel that this matter has been handled unfairly so we will be seeking advice about how to recoup our costs."

                    Do you think this wording will suffice?
                    I think you must take immediate professional advice - I am not sure that your wording was sufficient

                    Comment


                      #11
                      As others indicated, ground rent demands and court documents will be deemed served as they were served at the Property address registered with the Land Registry. As proprietors of the leasehold interest arguably arrangements could have been made for post to be forwarded or a notice of a service address for the Property could have been sent to the landlord.

                      Further, ground rent was payable annually, per the terms of the lease, so could have been paid irrespective of receipt of the section 166 Notice.

                      Personally, I think it unlikely the Court will agree your claim with regard to legal costs for a CCJ already entered. The time for entering a defence and/or counterclaim since passed. You will likely win in respect of miscalculated interest but this will be a small sum.

                      Unfortunately, you could find the landlord attempts to charge further legal fees defending this action. If the case is largely found in favour of the landlord, the Court might well award costs against you.

                      Depending upon how quickly you settled the CCJ, you may be able to prevent this being recorded against your name adversely impacting on your credit history for 6 years. Presumably the action was brought in the name of all of the owners of the lease so it will be in their interest to support you. Are they?

                      Did the mediation session go ahead? If it did, what happened?

                      I am sorry the above is not helpful. As others’ suggested I would take legal advice so you can present the best possible case. It may be worth considering making an offer Without Prejudice to the landlord in advance of the hearing but take advice first.

                      I wish you luck. It is quite ridiculous the legal and other fees leaseholders end up incurring.




                      Comment


                        #12
                        Originally posted by sgclacy View Post

                        I think you must take immediate professional advice - I am not sure that your wording was sufficient
                        I see where you are coming from - but this entire fiasco has cost me so much money that at this stage I cannot afford to spend more on professional legal fees. I am hopeful that the court will be sympathetic.

                        Comment


                          #13
                          vmart,

                          When we purchased the property, we were dealing with the freeholder directly (and he was aware of our correspondence address). However, at some point in 2018, the freeholder instructed a managing agent to look after the property and never informed us of this change. The managing agent was informed of our address by the freeholder, but decided not to send any post to us there. Indeed, it is doubtful he sent any post to us at the investment property either, as I never found any post on any of my trips there. Furthermore, our correspondence address is on the lease.

                          Our claim is for the miscalculated interest and the legal fees - we were never provided with a breakdown of any of it. And as others have indicated on the thread, the cost seems to be excessive. We initiated the Money Claim in August last year - shortly after the CCJ, but it has taken all this time to transfer to a court and have the case heard due to COVID delays, etc.

                          We paid the amount demanded pretty much immediately in July last year, so the CCJ has been satisfied. There were 2 names on the CCJ: mine and one other co-owner who I am currently in a dispute with. He agreed to pay 50% of the CCJ demand, but did not want to pursue action via a Money Claim.

                          The mediation session did go ahead, but the managing agent refused to listen to any of my points and instead kept repeating himself that the notice had been served and all money was rightfully due.

                          I really do not have money to pay professional legal fees, but I am hopeful that with the advice from the kind people on this forum (including yourself) I will be in a good position to present a robust bundle and case for the court.

                          Comment


                            #14
                            There is much in your favour arising from your last post. When you wrote the correspondence address is on the lease, is this also the address registered at the Land Registry? As there is more than one proprietor, is the correspondence address your address.

                            Relevant points: (Prepare a chronology of events for the bundle. This will help the Court)
                            • The freeholder was provided with a service address for the property which s/he used.(What evidence can you present for this? This needs to go in the bundle)
                            • At some point the management of the property was transferred to a managing agent but you were not informed of this change. (When and how did you learn of the managing agent?)
                            • The managing agent was provided with the service address (again, what evidence can you include in the bundle?)
                            • You wrote ‘the managing agent decided not to send post to the service address’ – how do you know this?
                            • The s.166 Notices were not served at either address. If they had been you would have been aware of the demands which were not received at your address; or the Property address (refer to your visits to the Property. Can you provide evidence of visiting the Property around the time the Landlord claims the ground rent demands were issued?)
                            • You appreciate ground rent is payable and have paid the ground rent demands.
                            • The Landlord’s claim included a ground rent demand that was already paid.
                            • You agreed to and actively participated in mediation but the managing agent refused to engage in discussion. (This is a key point since Courts encourage mediation and I understand it is often relevant when Courts make decisions about costs.)
                            • The interest calculation is incorrect (you should work out how much the Landlord would be entitled to under section 69 of the County Court Acts 1984). Interest is charged at 8% and calculated from the date the money is due until the date it was paid. I don’t think the Landlord can claim interest on legal fees only on the amount of the claim related to ground rent demands. I would calculate figures for both scenarios so you are prepared for either during the hearing.
                            • Your argument is the Landlord is not entitled to any of the legal costs since the ground rent demands were not issued therefore not payable and no claim should have been brought. However, the situation is complicated as Court documents were sent to the Property therefore it was at that time you should have entered a defence.
                            • You paid the CCJ to avoid further adverse impact on your credit history making clear ‘this matter has been handled unfairly so we will be seeking advice about how to recoup our costs. (Include evidence in the bundle).
                            • Overall you are asking the Court to determine none of the charges except ground rent and interest on the ground rent are payable. Therefore, you seek reimbursement from the Landlord.
                            (If you paid the CCJ within 30 days [I think its 14 or 30 days] it should not be registered on your credit record. Follow this up as a CCJ will seriously impact on your credit history for 6 years.)

                            I hope the above is of some help. Please note I have no expertise in this area.

                            Comment


                              #15
                              Hello again,
                              Revised point: overall you are asking the Court to determine none of the charges except ground rent (now paid) are payable. As your argument is the Landlord was not entitled to bring a claim as the s.166 Notices were not issued there should be no interest on ground rent payable. However, you still need to calculate interest and be prepared the Judge may not accept your argument.

                              BTW, who paid for the mediation?

                              Comment

                              Latest Activity

                              Collapse

                              • Reserve fund
                                by Starlane
                                Hello
                                Our lease requires us to pay into a reserve fund, is this fund subject to S20 consultation? Or would the monies be used as stated in the lease for regular cyclical decoration which would come under repair and maintenance? Meaning as its cyclical no S20 required even though the amounts from...
                                12-05-2021, 07:16 AM
                              • Reply to Reserve fund
                                by eagle2
                                It is important as well to check if the lease requires the reserve/sinking fund to be held in a separate bank client account. If there is only a general bank client account, it is often raided for other purposes....
                                16-05-2021, 04:58 AM
                              • Informal lease extension advice - linked with RPI
                                by NiallOisin
                                Hi, I hope all is well. I've read some fantastic and very helpful advice on this forum and hoped someone may be able to help me with the particularities of my situation.

                                I am currently helping my mother extend her lease. As she is eager to sell the property in the near future, we do not...
                                15-05-2021, 23:55 PM
                              • Reply to Advice for CCJ dispute over ground rent payments
                                by Macromia
                                It's possible that the OP doesn't know the outcome of the hearing yet....
                                15-05-2021, 21:02 PM
                              • Advice for CCJ dispute over ground rent payments
                                by Charlotte163
                                Advance warning: this is going to be a lengthy post – but I really would appreciate advice from anyone who might be able to help ..

                                For background: in 2017, I (along with 3 friends), purchased a leasehold property with the intention of renovating it and selling it on (the “investment...
                                02-05-2021, 11:55 AM
                              • Reply to Reserve fund
                                by Macromia
                                It will depend on the what the lease says about a reserve fund, and whether or not it restricts the way that the fund is allowed to be used....
                                15-05-2021, 20:54 PM
                              • Reply to RICS code
                                by Macromia
                                Which is why Article 2 needs to be read as well.

                                Article 2 gives approval to the third edition of the code.
                                Article 3 withdraws approval of the earlier version so that there can be no argument which applies.

                                Eventually the 4th edition will likely become the approved version...
                                15-05-2021, 20:50 PM
                              • RICS code
                                by Starlane
                                Hello
                                we are only a small site and for a small site which is supposed to be a dormant RMC the SC seems ridiculously high with most of the money being demanded for company Secretary , company accounts and high management fees and insurance.There are no services. The directors have now said that...
                                05-05-2021, 17:05 PM
                              • Reply to RICS code
                                by fos333
                                As Macromia stated in #65 the 3rd Edition of 'The Code' is currently approved.

                                See;

                                https://www.legislation.gov.uk/uksi/.../made/data.xht...
                                15-05-2021, 19:26 PM
                              • Reply to Unreasonable Withholding of Consent by Freeholder?
                                by Lawcruncher
                                Structure is about support and enclosure. They are the parts which, if you interfere with them, may prejudice a building's integrity rendering it liable to collapse or leaving it exposed to the elements.

                                When it comes to alterations to flats and maisonettes there should be a balance which...
                                15-05-2021, 18:51 PM
                              Working...
                              X