Ground rent and admin fees

[freeholderGR]

I have a tenant who only every pays his ground rent after a claim has been issued for it. I do issue the correct 166 notices and then after non payment by the due date issue 2 reminder invoices with admin fees at £30 each. I have been to court twice for the admin fees on principle but the judge in each case has said that section 158 schedule 11 of the CLRA is only enactable in the case of non payment of service charges. (I keep getting the same judge). This is surely wrong but i dodn't know how to convince the judge. Do you know of any good arguments and/or case law?
Does the lease have to specify that admin fees are payable in the event of late payment?

[andydd]

Ill answer your last part first..yes. If no provision within the lease then no extra charges can be made, also did you sent the Administration Charges - Summary with rights with the demands for admin charges, this is often overlooked by freeholders.


Now the first part, I'm pretty certain that admin cahrges for failure to pay ground rent are allowable (if the lease allows and served properally), Section 158 gives LVT juridstiction to consider the 'reasonableness' of such charges (an LVT can consider admin charges as a result of non payment of ground rent but not ground rent itself).

I sympathise with you, sometimes Judges are very lacking in their knowledge (I was up against one who refused to believe me that the litigant in person rate had recently been increased and there was little I could do without getting into an inapropiate argument).

There must be plenty of case law, the issue of ground rent admin charges comes up quite a lot.


Worth noting this is all academic if the lease doesnt allow such charges but you could of course claim interest and as much costs as possible in county court.

Andy
Andy

[leaseholdanswers]

the judge in each case has said that section 158 schedule 11 of the CLRA is only enactable in the case of non payment of service charges.

The Judge is wrong, you need to look at both the SI to see that it applies to a variety of charges.

However it is highly unlikely that your lease allows you charge admin costs ( to which Sch 11 ) applies for a simple money claim.

If it does then please quote the wording of the lease, otherwise it is a simple money claim and see if you can claim, as Andydd has said, your own costs and the fee to be added to the judgement,a s well as including interest in the claim. After all if the rent is right and correctly billed they have no defence to not being and being idiots!

http://www.direct.gov.uk/en/MoneyTax...oney/DG_195639

[freeholderGR]

ground rent admin fees.

Are we therfore saying that admin fees charged in connection with sending reminder
invoices are not recoverable if this is not specified in the lease and that
section 158 is merely legal backup to such a clause along with the Adminstration Charges
statutory notice (this was served)? This would be annoying as none of my leases contain such a clause.
There would therefore be nothing to stop a tenant never paying a ground rent on time.

Ill answer your last part first..yes. If no provision within the lease
then no extra charges can be made, also did you sent the Administration Charges - Summary with
rights with the demands for admin charges, this is often overlooked by freeholders.


Now the first part, I'm pretty certain that admin cahrges for failure to pay ground rent are
allowable (if the lease allows and served properally), Section 158 gives LVT juridstiction to
consider the 'reasonableness' of such charges (an LVT can consider admin charges as a result of
non payment of ground rent but not ground rent itself).

I sympathise with you, sometimes Judges are very lacking in their knowledge (I was up against one
who refused to believe me that the litigant in person rate had recently been increased and
there was little I could do without getting into an inapropiate argument).

There must be plenty of case law, the issue of ground rent admin charges comes up quite a lot.


Worth noting this is all academic if the lease doesnt allow such charges but you could of course
claim interest and as much costs as possible in county court.

Andy
Andy

[freeholderGR]

Sorry but what is the SI?

[leaseholdanswers]

Are we therfore saying that admin fees charged in connection with sending reminder
invoices are not recoverable if this is not specified in the lease and that
section 158 is merely legal backup to such a clause along with the Adminstration Charges
statutory notice (this was served)?

Yes and no; any costs you incur are only recoverable if they are provided for in the lease, and if they are, then S 158 applies as to their reasonableness.

http://www.legislation.gov.uk/uksi/2007/1258/made

Note reference to Lands Tribunal should be changed to Upper Chamber

Don't overlook that you may be able to recover interest costs and fees in a court application.

[andydd]

So..as mentioned.

Admin Charges have to be specifically mentioned in the lease, something along the lines of 'If ground rent is not paid with x days a charge of £xx will be made and/or interest charged at a rate of 6%', many leases have a catch all clause which some freeholders try to use but IMO an LVT should construe this using the Contra proferentem rule (http://en.wikipedia.org/wiki/Contra_proferentem).

This is for example along the lines of bank charges which are mentioned in the original T&C from your bank, you cant just add extra charges on that the leaseholder knew nothing about.

As LHA has said S158 is about the reasonableness of the charges (assuming they are payable), in my example..at an LVT they concluded £130 was too much for a simple letter and allowed £25, although my lease does not allow any sort of admin charges or interest but does allow charges related to a S146 procedure..but lets not confuse things.

Unless as suggested you can find the lease clause that allows admin charges its best to forget it all, although the extra court fees and 8% interest could add upto a few hundred so surely this would insentivise the leaseholders to pay up on time.