Unpaid Service charges, ccj, forfeiture

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    Unpaid Service charges, ccj, forfeiture

    Hi all,
    ​​​​​​so we have a fairly old lease, where the service charges are paid on demand after the expense occurred within 21days of demand served.

    So far, we had one service charge invoice with ccj recorded and unpaid by the leaseholder. Amount under £350.

    Additionally we have another claim which is not being defended and we could ask for default ccj - amount is more than £350.


    Section 168 of the Common hold and Leasehold Reform Act (the 2002 Act) imposes various statutory pre-conditions to serving a section 146 notice:

    -The complained of breach has been finally determined by the FTT; or -The tenant has admitted to the breach; or -The breach has been the subject of a determination by a court, or an arbitral tribunal in proceedings pursuant to a post dispute arbitration agreement.

    at the same time, there is

    A default judgment for unpaid service charges is a final determination for the purposes of section 81 of the Housing Act 1996 (ie a landlord's right of re-entry or forfeiture for failure to pay service charges) and, where a default judgment is entered, the issue is to be treated as having been determined between the parties to that judgment

    So my question is - can I apply for default ccj and once it's granted - could I instruct the solicitor to start forfeiture?

    Or do I need to ask for the hearing to take place and then once the Judgement is granted instruct solicitors re forfeiture?

    Property mortgaged but so far our letters to the mortgagee went unanswered.

    Thank you all!

    My understanding is a default CCJ doesn't qualify as a court ruling under the act however I have issued S146 notices several times with just a default CCJ and mortgagees have always then paid.
    So no, you won't get forfeiture but yes, you will get the money.


      Thank you, Section20z , the issue is that the leaseholder has somewhat unorthodox ideas about the lease and his responsibilities.

      So we really want to proceed with forfeiture - we do understand that eventually mortgagee or leaseholder would pay.

      Basically we want the leaseholder either to comply with the lease or be out of the equation.


        The mortgage lender will nearly always pay to avoid forfeiture so unless the mortgage is also in arrears and it suits the lender it's very unlikely you will succeed in obtaining forfeiture.


          Don't forget your pre action letter.

          But you cannot instigate forfeiture proceedings if amount owing is less than £ 350
          has been unpaid for 3 years ( what ever the amount )


            ram - the pre action letter re claim or do you pre section 146 notice.

            Im in the process of digging and yes a default ccj would suffice - courtesy of lease advice:

            By a judgment dated 22nd September 2011 HHJ Dight sitting at Central London County Court in the case of “Church Commissioners for England v Koyale Enterprises Limited and one other” decided that a leaseholder can lose their flat due to arrears of service charges even though their liability to pay the charges has not been tested at a full hearing.

            In March 2011 the Church Commissioners obtained a default judgment for unpaid service charges against a leaseholder and then issued possession proceedings. This claim was dismissed by the district judge but upheld on appeal by HHJ Dight who decided that a default judgment could be regarded as a “final determination” within the meaning of Section 81 of the Housing Act 1996.

            Section 81 of the 1996 Act (as amended) states that before a forfeiture notice can be served there must be a “final determination” that the service charge is payable. The determination can be made by the Leasehold Valuation Tribunal, an arbitrator or a court. Alternatively the flat owner can admit the sum is payable.

            Following the issue of proceedings in the county court for arrears the landlord can enter a default judgment when no response or defence is filed by the leaseholder


              ram , pre action letter for section 146?

              And yes the default judgement is applicable according to Church Commissioners for England v Koyale Enterprises Limited and one other


                Originally posted by Anna1985 View Post
                ram , pre action letter for section 146?

                And yes the default judgement is applicable according to Church Commissioners for England v Koyale Enterprises Limited and one other
                A S146 notice is a pre action letter.
                I generally give the mortgagee (& lessee) one last chance to pay before issuing s146 so you could call that a pre pre action letter if you like :-)
                Thanks for the case reference, very interesting


                  Section20z , sorry what do you mean one last chance ?

                  I don't want to send any more letters to the leaseholder as there is judgement - unpaid, and once I apply for a default judgement there would be another judgement which would also go unpaid - which in my opinion already substitute a notice?


                    Can anybody recommend a solicitor to issue the claim?

                    I have made cals to couple of companies but would really prefer a personal recommendation.

                    Thank you


                      Do you mean to commence forfeiture ? Before employing lawyers I would write to mortgagee enclosing copy of the default judgement and say you will now be issuing forfeiture proceedings in 7 days if the total is not paid in full. Maybe remind them that this will incure further costs and their security will be in jeopardy.
                      By rights you should also inform lessee.
                      I have only ever had one bank not pay and I issued s146 myself (templates are online) at which point they capitulated (with another £250 added).

                      It will never get as far as forfeiture so even if you make a minor mistake, you simply re-issue.
                      Unfortunately I don't know any competent Solicitors.


                        Thank you all for help and advice.

                        I'm now talking to solicitors and one of the services offered is to check whether or not the right for forfeiture is being waved or not.

                        However, in my understanding the right arises when there is a breach, a breach is when there is a determination of the arrears - am I misunderstanding something?

                        Thank you


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