I have been in dispute with a group of connected parties for about 3 years now and have just recently had an LVT decision go in my favour whereby service charges have been reduced by approx. £1500. This is about 3 years’ worth of current charges so I would prefer to have them refunded. The trouble is that the matter is complicated by the fact that the current landlord is a limited company and although they are connected to the landlord who was responsible (in the main) for the service charges that were disputed, they insist on the protection of the separate legal identities.
The parties in question are the old landlord (an individual), the old managing agent (a limited company with the old landlord and his father being directors) and the new landlord (a limited company with the old landlord’s mother and her sister as owners/directors). The new landlord has no assets apart from the freehold (bought for £2500 and probably worth around £2000) which is most likely not a net asset because I’m pretty sure that it was not bought with company money, so there is a debt of £2500 to somebody. The family own 3 of the 6 flats as individuals. Ground rent is only £150 per year in total.
I had originally been withholding payment of these charges but half way through the LVT case there was an assignment of debt from the new landlord to the old landlord for the service charges in dispute and proper invoices were issued which I decided to pay. If my understanding is correct then by virtue of the LVT decision I now have a claim against the new landlord which isn’t in a position to pay. I may have a claim against the old landlord by virtue of the ‘debt assignment’ possibly being deemed fraudulent or constructive fraud. They’ve assigned a debt which turned out not actually to be a debt.
I suppose my question is “what will happen if I enforce the decision against the current landlord”. That is the easiest option and something I could handle myself. I’ve heard I could have the company wound up if they don’t pay but that it will cost me close to £1000. I’ve also heard that it is the duty of the directors to wind the company up themselves if it is insolvent but doubt they will do this.
I suppose the other option is doing nothing and not paying future service charge demands, however I wonder how the freeholder will be able to deal with less funds than are needed to look after the property. This might be playing into their hands because they already try and get away with not spending any money and I wonder whether they could provide a reduced service of communal heating on the basis of not being able to afford to pay. Communal heating is something I rely on but they don’t need in their flats as they also have their own separate heating.
Any thoughts/advice appreciated.
There is nothing in the lease which dictates how service charges paid in excess of costs are treated.
The parties in question are the old landlord (an individual), the old managing agent (a limited company with the old landlord and his father being directors) and the new landlord (a limited company with the old landlord’s mother and her sister as owners/directors). The new landlord has no assets apart from the freehold (bought for £2500 and probably worth around £2000) which is most likely not a net asset because I’m pretty sure that it was not bought with company money, so there is a debt of £2500 to somebody. The family own 3 of the 6 flats as individuals. Ground rent is only £150 per year in total.
I had originally been withholding payment of these charges but half way through the LVT case there was an assignment of debt from the new landlord to the old landlord for the service charges in dispute and proper invoices were issued which I decided to pay. If my understanding is correct then by virtue of the LVT decision I now have a claim against the new landlord which isn’t in a position to pay. I may have a claim against the old landlord by virtue of the ‘debt assignment’ possibly being deemed fraudulent or constructive fraud. They’ve assigned a debt which turned out not actually to be a debt.
I suppose my question is “what will happen if I enforce the decision against the current landlord”. That is the easiest option and something I could handle myself. I’ve heard I could have the company wound up if they don’t pay but that it will cost me close to £1000. I’ve also heard that it is the duty of the directors to wind the company up themselves if it is insolvent but doubt they will do this.
I suppose the other option is doing nothing and not paying future service charge demands, however I wonder how the freeholder will be able to deal with less funds than are needed to look after the property. This might be playing into their hands because they already try and get away with not spending any money and I wonder whether they could provide a reduced service of communal heating on the basis of not being able to afford to pay. Communal heating is something I rely on but they don’t need in their flats as they also have their own separate heating.
Any thoughts/advice appreciated.
There is nothing in the lease which dictates how service charges paid in excess of costs are treated.
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