Freeholder demanding extortionate fees for notice of remortgage

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  • sgclacy
    replied
    Originally posted by eagle2 View Post
    It would be interesting to know if any RTM Company has charged the freeholder an administration charge and if so, has the freeholder challenged the reasonableness of that charge at the FTT,
    An RTM can only collect ground rent if they reach an agreement with the freeholder. I do have an agent who acts for an RTM, and they collect my rent for me for 10% of the rent

    The freeholder can hardly then a few years later trot off to the FTT to challenge the fee !

    In any event it is not a term of the lease so the FTT will not deal with it

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  • eagle2
    replied
    It would be interesting to know if any RTM Company has charged the freeholder an administration charge and if so, has the freeholder challenged the reasonableness of that charge at the FTT,

    Leave a comment:


  • eagle2
    replied
    If the RTM Company collects ground rent, presumably it may charge the freeholder a reasonable fee for charging, collecting monies and paying the freeholder.

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  • Section20z
    replied
    Originally posted by sgclacy View Post

    the fee goes to the freeholder with a copy to the RTM as the RTM does not collect the ground rent and the notices need to be served on the freeholder as the freeholder is the only one who can give a receipt for ground rent. Further if there were breaches under the lease the RTM could inadvertently waiver the landlords rights by accepting the notices
    Yes, all true but in some cases RTMs do collect ground rent on behalf of the freeholder and is permitted under the Act

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  • Section20z
    replied
    You decide in post #1 to ignore the advice of the Leasehold Advisory Service as you believe the FTT have looked at such matters.
    In which case that should be your first port of call to ascertain a "reasonable fee".
    All FTT findings are available online.

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  • eagle2
    replied
    The courts and the FTT do not take too kindly to claims for what they consider to be trivial amounts, they expect the parties to compromise and reach agreement. They would most likely suggest mediation. I would wait until there are other charges to challenge before applying to the FTT but if you decide to make an application, it is important that you are able to provide evidence that you have acted reasonably at all times by offering payment and suggesting ways of settling the dispute,

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  • EssexLL
    replied
    Thanks very much again for your responses.

    If you decide to send a cheque in full and final settlement of all monies claimed, I suggest that you retain a copy of the cheque and obtain proof of posting from the Post Office.

    If you decide to apply to the FTT, I suggest that you are able to demonstrate that you have attempted to deal with the dispute in accordance with the lease and that you have suggested alternative ways of resolving the dispute.
    Certainly, I would make this clear and send by recorded delivery.

    Hence I would maintain that forty quid is a perfectly reasonable fee, and possibly a bit more;
    By this I assume you mean asserting to the freeholder that this is a reasonable fee, and perhaps enclosing a cheque for the balance stating that I consider the matter settled?

    Its not worth applying to Tribunal over such an amount
    Fair enough, but if (as expected) the freeholder does not accept that my payment settles the matter, my account will remain in arrears and increasingly so assuming interest etc. is applied. Therefore the question remains whether to ignore the fact that my account is in arrears, and I may well receive ever more threatening demands for payment, or attempt to resolve it through the FTT.

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  • eagle2
    replied
    The following is an extract from the Leasehold Advice Centre:

    "Most leases contain provisions requiring the consent of the landlord to which can include sub-letting, assigning the lease and making alterations to the flat. Such approvals passes to the RTM company, although the company must keep the landlord informed and give notice to the landlord"

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  • eagle2
    replied
    My understanding is that a RTM Company would set and retain the fee but would need to inform the freeholder. It is agreed that a RTM Company would not collect ground rent.

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  • sgclacy
    replied
    Originally posted by Gordon999 View Post
    If you and other leaseholders are willing to set up RTM company to take over administer of the service charge account, the RTM company replaces the landlord's agents and the £35 fee goes to the RTM .
    the fee goes to the freeholder with a copy to the RTM as the RTM does not collect the ground rent and the notices need to be served on the freeholder as the freeholder is the only one who can give a receipt for ground rent. Further if there were breaches under the lease the RTM could inadvertently waiver the landlords rights by accepting the notices

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  • flyingfreehold
    replied
    Its not worth applying to Tribunal over such an amount. Solicitors don't usually bother doing it, but their standing instructions when dealing with a mortgage or re-mortgage is to quote a motrgage roll number ( ie an account number). This is so that if the landlord has to write in because the borrower has failed to pay ground rent/service charge, the lender can readily trace the file. But most solicitors, as I say dont bother. Many a time I have written to an arrears department of a lender about a leaseholder in arrears and they have that they cant trace the account without a mortgage account number. So, nine times out of ten, we return Notice of Mortgage to the solicitor serving Notice, telling the solicitor that they are in breach of their own retainer as the Mortgage account number is required. Hence I would maintain that forty quid is a perfectly reasonable fee, and possibly a bit more; but not for the reasons that might be supposed.

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  • eagle2
    replied
    You could easily argue that £35 is more than reasonable at the present time, there is a solicitor who posts on this forum who has indicated elsewhere that £20 would be an appropriate amount for an office junior to deal with a notice, Tribunals have decided in the past that £40 is reasonable.

    I enquired about the inflation adjusted amount because a freeholder is likely to argue that £35 was considered to be a reasonable sum in 2001 and that it should at least be adjusted in line with inflation. It was only to prepare you for what to expect. It is always useful to anticipate any response from the other side.

    If you decide to send a cheque in full and final settlement of all monies claimed, I suggest that you retain a copy of the cheque and obtain proof of posting from the Post Office.

    If you decide to apply to the FTT, I suggest that you are able to demonstrate that you have attempted to deal with the dispute in accordance with the lease and that you have suggested alternative ways of resolving the dispute.

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  • EssexLL
    replied
    Thanks for your responses.

    What is the date of the lease?
    2001

    What was the inflation adjusted equivalent at the time of your remortgage?
    About £60, although the lease does not mention inflation as a tool for calculation what is reasonable. Nevertheless the freeholder is demanding much more than this.

    For the amount involved, it is not worth applying to court or to the FTT
    For a court, perhaps, but £120 every time I remortgage will soon add up making FTT potentially more attractive?

    I suggest that you make an offer to pay an amount to the freeholder "wiithout prejudice subject to costs" in order to demonstrate reasonableness on your part and protect yourself in case the freeholder takes legal action against you, which is unlikely,.
    What kind of sum would be "reasonable" in these cases? The problem is they literally do not respond to any communication and from experience and anecdotal evidence I suspect they will not accept anything less what's been demanded. My last option (and what I think I will do) would be to make a formal written complaint, enclosing a cheque. However assuming they don't budge, I'd still be left with a choice of whether to:

    a) Ignore their demands, interest, legal fees etc, perhaps go to FTT later if it becomes an issue (e.g. want to sell)
    b) Got to FTT right away before they pile any more fees onto my account

    RTM Company is a nice idea but for the size of development and amount of time I have to resolve this, it's not going to be a feasible solution this time unfortunately. I should point out, I have no issue paying the £35 or a reasonably higher amount to the freeholder as per the terms of my lease. I just don't want to get fleeced every time I change mortgage providers.




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  • eagle2
    replied
    I agree with Gordon999, if 50% of the leaseholders, including yourself, wish to form a RTM Company, it could take over all the management duties of the freeholder including the right to collect the fees. In that case, the RTM Company would decide whether to collect the £35 or increase that sum to a reasonable level.

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  • Gordon999
    replied
    If you and other leaseholders are willing to set up RTM company to take over administer of the service charge account, the RTM company replaces the landlord's agents and the £35 fee goes to the RTM .

    Leave a comment:

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