It does not make sense for a management company to take legal action. It cannot recover more than 100% and it cannot be sure of recovering its claim in full. Sooner or later, it will have its claim reduced, which causes a problem for all leaseholders.
It makes sense for the company to seek authorisation to charge interest whilst avoiding going to court.
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This sounds as if it is just faffing around. If service charges are not paid (and if they are legitimate service charges) the lessees should be in court pronto. That is the obligation of the FH (unless they cover the shortfall themselves). Interest can be added at County court if the court so deems.Leave a comment:
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Agreed - and any leaseholders who are not also members of the company will almost certainly not have to pay.
Interest can be added to debts, including service charge debts, if action to recover the debts is started in the county court, but that will be discretionary.Leave a comment:
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It is unusual but there is nothing to stop the Company from deciding to charge interest. There is an important difference though, it is a Company charge and not a charge under the terms of the lease. If there are any disputes, they would need to be resolved in court because the FTT does not have the jurisdiction to deal with them,Leave a comment:
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AGM passed special resolution to collect interest on arrears legally upholdable?
Would the courts uphold the terms of a special resolution voted and passed at AGM to collect interest on service charge arrears, where the relevant Leases do not mention interest therefore no legal right to charge is granted, but neither is it explicitly prohibited by any covenant? Or is the only way to guarantee you secure that right to recover interest on arrears is to have the relevant Lease(s) varied to incorporate addition and collection of interest in the service charge clauses within the relevant Lease?
is it a measured risk that is largely dependant on any ' judge' (whether in court or FTT)?
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Odd one here. Apologies if this is in the wrong place.. but a vote was taken when I was a volunteer director on the board of our freehold company (property is leasehold with share of freehold), about whether or not to pursue a leaseholder for a potential breach of lease. It was very murky, not much...08-08-2022, 16:44 PM
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I didn't know that. Does that mean that other professional costs - eg surveyors costs, accountants, even the instruction of a new Managing Agent - that would otherwise be covered due to their quantum, are not covered by Section 20?...09-08-2022, 12:49 PM
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I wonder if there could be grounds for misapplication of funds by the directors, if acting against the majority and professional advice. Pretty serious if so.09-08-2022, 12:24 PM
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Thanks all. We had no idea they were spending this much, no. It's only been revealed in the last accounts, and then from a concerned current director whistleblowing about the current year. We've had a long-standing problem with some directors operating as if they were managing agents themselves, rather...09-08-2022, 12:02 PM
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Unfortunately (forgetting for the moment that the main purpose of S20 is to further monetise FHs, and to create a shield to make non-transparency even less amenable to addressing)
I don't think legal costs falls within the remit of S20
I would not be surprised if Directors...09-08-2022, 11:23 AM -
why are rag tag and bobtail running things when you employ a managing agent ? this is precisely what the agents are supposed to be doing in an amateur setup like this, if I was a flat owner I would not be happy on my service charge being wasted on this. FTT might be best solution now, but not sure...09-08-2022, 09:28 AM
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Were you notified as leaseholders that £40k was to be spent on legal advice? Was a Section 20 notice received regarding the legal costs?...09-08-2022, 05:34 AM
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The simple answer is yes, a board can overturn a previous decision. It was unwise after the leaseholder held a document stating that the matter was closed.
Who is the accounts department, is that not part of the managing agent? Are you saying that one part of the agent is acting contrary...09-08-2022, 05:26 AM -
I was late in paying service charge for a flat. Letter came from solicitor. I paid in full including their legal fees (their fees were £350), but was late by their deadline. Things go filed at Court, so they want an additional £1,200 in legal fees (on top of the £350 already paid. On the court form...07-08-2022, 20:47 PM
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I doubt that contacting the SRA will assist you.
Subject to your replies, you should consider making an offer to settle on a without prejudice basis subject to costs. The earlier you make the offer and the less work which has been carried out by the solicitor, the better.09-08-2022, 05:13 AM
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