AGM passed special resolution to collect interest on arrears legally upholdable?

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  • eagle2
    replied
    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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  • AndrewDod
    replied
    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.

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  • eagle2
    replied
    Originally posted by Macromia View Post

    Interest can be added to debts, including service charge debts, if action to recover the debts is started in the county court.
    Absolutely right, the Company could claim 8% using MCOL, I wonder what rate of interest it is claiming under the resolution (an ordinary resolution would have sufficed)

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  • Macromia
    replied
    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.

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  • eagle2
    replied
    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,

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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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