Joint freeholder won't pay his share

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    Joint freeholder won't pay his share

    Hello

    I don't know if anyone can help with this, but thought I'd ask before going properly into any lengthy/costly legal advice.

    I am one of three joint owners of a freehold. The house is converted in three flats, and the leaseholder for each flat owns a third of the company we set up to buy the freehold several years ago.

    One of the leaseholders has refused to pay his ground rent and his share of the buildings insurance and I do not know what options we have to force him to pay his share. He is many months in arrears.

    What are the consequences for a leaseholder who does not uphold their financial responsibilities as defined in their lease? Do we have any option to compel him to pay his debts without actually taking him to court? If I do need to work through a solicitor, what is the best way to find someone who can help with this sort of issue?

    Many thanks in advance for any advice you can offer.

    #2
    There are many posts on here about this.

    1. Read your lease ( Lessor obligations ), find the "to pay one third
    of the maintenence costs" but read it ALL, as it should
    state what the freeholder can do if service charges are not paid.

    It may mention section 146.( and 147 ) Which states
    ( but this description will be worded differently in your lease).
    " A notice issued under Section 146 of the Law of Property act
    1925
    The notice must specify the breach complained of and if the breach
    is remediable, the tenant ( lessee ) to remedy it; and in any case
    require the tenant to monetarily compensate the landlord."

    If the leaseholder refuses, as he had, to pay his share of the
    maintenence / service chrges, then you can tell him you will
    take steps to forfeit his flat.

    You can onlt make a threat to forfit his flat / property, but if
    he still wont pay, then it's the courts.
    ( Must have a ruling from the L.V.T first, before it goes to court.

    Send your letter to him stating that unless he pays all monies due,
    you will apply to have the flat forfeited.

    You could SPELL out, that if its forfeted, he loses his property,
    he still has to pay the mortgage, but wil be removed from the property,
    and the freeholder can sell the property, and divide the proceeds
    within the company.

    A threat of forefiture usualy gets them to pay up.

    R.a.M.

    Comment


      #3
      Well I can't see the point of collecting ground rent and redistributing it to each other.

      Your company is a distinct legal entity and
      1: on the basis that the members/shareholders/officers agree, 2 against 1,
      2: that the BI, or any cost, has been calculated and billed in accordance with the lease and accompanying information,
      then sue them.
      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

      Comment


        #4
        Originally posted by leaseholdanswers View Post
        Well I can't see the point of collecting ground rent and redistributing it to each other.
        Agreed. It's not only pointless, but possibly costs you money.

        Lessees pay ground rent (say £100 per flat):
        Non deductable for tax purposes
        Company receives income (£300) subject to CT at 20%
        Company left with £260 in bank and then either:
        a) Is limited by guarantee so can't distribute it
        b) Can pay a dividend, so issues £86.66 dividend to each shareholder, in the hands of which this is taxable income subject to IT.

        Comment


          #5
          Originally posted by thevaliant View Post
          a) Is limited by guarantee so can't distribute it
          That's one of the very fundamental defects of the right to enfranchise legislation where not all ( as the majority of cases are) leaseholders participate.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            Thank you all for the responses -- it's brilliant. We collect ground rent so that we have a small amount of money put aside for maintenance. This has proven very useful several times. I agree that it would certainly be one solution to change the leases or jointly all agree not to pay ground rent, although we would then have a different problem when we needed to collect money for maintaining the building.

            many thanks again, I am very grateful for the advice

            Comment


              #7
              Originally posted by oswinshare View Post
              We collect ground rent so that we have a
              small amount of money put aside for maintenance. although we
              would then have a different problem when we needed to collect money
              for maintaining the building.
              Ground rent is not for upkeep or maintenence.

              As asked before, what does it say in the lease, that the freeholder
              has to do, to maintain the property.
              Each to pay one third ?
              each to pay on demand ?
              Freeholder to maintain the property ?
              Freeholder will present a bill, payable in advance, for last or
              anticipated repairs.

              You need at least £ 50 / 80 per month from each for repairs, and a
              3 year plan of maintenence, with costs.
              You can legaly neglect a house you own, but you cannot neglect
              a shared property.

              You need read the lease, and it will say ( or should ) that xxx will
              be kept in good order and repair, and thqat is the freeholders remit.
              it must be done, and to do it, costs money, and you have none !
              and one of you wont pay.

              You need to sit down and go through the lease and act on it.

              R.a.M.

              Comment

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