Arrears by Leaseholder (In house management)

[The Eagle]

We own the freehold of a purpose built block of 12 flats. A Company was set up. All 12 have a share in the freehold. I am one of two directors who run the non profit making management company. All 12 flats agree that the maintenance charge £80 a month is fair and reasonable and all expenditure etc is itemized on accounts that I produce for them at least three times a year.

One particular flat fails to regularly pay his £80 maintenance charge. To be quite honest he has continually contravened the lease since he purchased the premises 18 months ago and has no regard for any of his neighbours (I think we all know the type). He will miss 4 months then after numerous letters and threats about taking legal advise he will then pay. All well for a few months and the same problem arises. To hopefully avoid this problem we introduced a penalty payment scheme in out Leaseholders Handbook which basically charged him £20 rising to £60 for each letter sent to him for late payment. He agreed to this and signed the appropriate form agreeing to abide by the Lease Holders Handbook.

He has now not paid any maintenance charge since June 08 owing us £320 maintenance money and £120 for reminder letters sent to him (at least one a month). He ignores any letter I send to him. I have also written to his mortgage company who basically said 'they have forwarded the letter to him asking him to contact me' Needless to say I have heard nothing.

Two weeks ago I gave him, and advised his mortgage company,a final last request to pay his arrears by close of business on 24 October otherwise we will seek legal advice and take action against him.

We are prepared to take legal action but for obvious reasons we do not want to run up a solicitors bill that ultimately all the other leaseholders have to pay. Can we pass the charge on to him.

My question is where do I go from here bearing in mind he does not respond to any letters any advice would be greatly appreciated

Many Thanks In Advance

[Poppy]

Perhaps your contact with the mortgagee was not bullish enough. Did you include phrases such as "breach of the lease", "no payment could lead to forfeiture". Did you enclose a statement?

Basically, you don't want the mortgagee to ignore you. You should do your best to encourage the mortgagee to put pressure on their borrower to pay their service charge. This costs virtually nothing. Make sure you put "cc Borrower name" at the bottom of the letter, so that the mortgagee knows that they are not the only recipient and therefore does not merely forward your letter.

Make going to a solicitor the very last resort.

[The Eagle]

Perhaps your contact with the mortgagee was not bullish enough. Did you include phrases such as "breach of the lease", "no payment could lead to forfeiture". Did you enclose a statement?

Basically, you don't want the mortgagee to ignore you. You should do your best to encourage the mortgagee to put pressure on their borrower to pay their service charge. This costs virtually nothing. Make sure you put "cc Borrower name" at the bottom of the letter, so that the mortgagee knows that they are not the only recipient and therefore does not merely forward your letter.

Make going to a solicitor the very last resort.

I did do exactly what you had suggested but it seems to no avail.
All they wanted was to be informed when we were taking the action and a copy of any court proceedings.
Unfortunately I looks like I have no other option but to seek legal action. Any one know if we can reclaim all our costs?

[Poppy]

Read the lease. If the lease states that the lessor can recover legal and professional fees through the service charge - then you can do exactly that.

[The Eagle]

Read the lease. If the lease states that the lessor can recover legal and professional fees through the service charge - then you can do exactly that.

The lease (1958) does not say that, but the Leaseholders Handbook that everyone agreed to and signed said we could recover all costs in the event of having to take legal action.

[Lawcruncher]

The lease (1958) does not say that, but the Leaseholders Handbook that everyone agreed to and signed said we could recover all costs in the event of having to take legal action.

I would need to see the "Leaseholders Handbook" to know if its provisions are enforceable - I would be willing to place a small wager that they are not.

Why not sue using the small claims procedure? The cost will not be great and if not recovered will be shared between all the flatowners.

[The Eagle]

I would need to see the "Leaseholders Handbook" to know if its provisions are enforceable - I would be willing to place a small wager that they are not.

Why not sue using the small claims procedure? The cost will not be great and if not recovered will be shared between all the flatowners.

You are probably correct that the handbook is not enforceable. It was compiled and written by me and I have no legal experience.
Yes I could use the small claims procedure but once again it seems it will take a considerable amount of my time up ONCE again and no doubt just for him to continue failing to pay again.
It seems to me that for someone to get money that is owing to them (in this case maintenance money) that it could cost us (the residents who play fair and pay on time) a considerable sum of money just to try and get back what is owing to us.

I thank you for your time and advice.

[jeffrey]

I would need to see the "Leaseholders Handbook" to know if its provisions are enforceable - I would be willing to place a small wager that they are not.

Why not sue using the small claims procedure? The cost will not be great and if not recovered will be shared between all the flatowners.

Anyway, if Court orders that T must pay L's costs but he doesn't, you (L) could:
a. seek Charging Order on his leasehold; and/or
b. take forfeiture proceedings (if amounts/periods suffice).

[tenant29]

The lease (1958) does not say that, but the Leaseholders Handbook that everyone agreed to and signed said we could recover all costs in the event of having to take legal action.

Try - http://www.slcsolicitors.co.uk/

[The Eagle]

Many thanks to all.
I WILL keep you updated of action taken and final outcome

[billericayboy]

Sounds like a problem i had.

A Lesee owned two flats and signed them over to his children for Tax purposes but he has power os attorney and handles their affairs. Well they have refused to pay the 2008 insurance and ground rent totalling £ 140 each flat. after letters to them and their solicitor i got fed up and went on line and completed a Small Claims Form with all the information and emailed this to their solicitor and sent a hard copy by registered mail to their address, telling them if the debt was not paid by 1-11-08 the papers would be submitted to the court.

By return of post (almost) i received a cheque from the solicitor. It could have been the court fees that are added onto the claim that made them comply ??

I wonder whether this will work for you ?

PS. This Lesee took the company to court 3 years ago and lost and we were awarded all our costs.

[The Eagle]

The problem here is he doesn't have a solicitor as such ........well not yet
I give up a lot of my time running this Management Company without charging ANY of the 11 other leaseholders anything. At the moment I just do not want to waste anymore of my time filling in forms etc etc.
I have approached SLC Solicitors and discussed the best way forward. In a nutshell his next monthly payment is due by 8th November, from past history there is no way he is going to pay this; then on that day I will then instruct them to proceed.

I will keep all updated