Late payment charges - SC and GR

[leaseholder64]

It is never a good idea to start a new thread on the tail of an old one, particularly a very old one.

The original thread was about leasehold, for which there is lots of recent legislation, and is not, therefore relevant to your case.

You should start a new thread, with a more specific subject, in an appropriate section of the forum.

[skaler]

Hi leaseholdanswers and andydd,

Having read your posts on various forums, i am hoping that you could provide me some pointers / advice on dealing with a legal notice.

I am a landlord with freehold property in a private estate so have to pay estate service charge.

I couldn't make the payment for the most recent invoice issued in Jan 2017. This was followed by a reminder in April 2017. Now i have received a solicitor notice under section 121 (3) & (4) of Law of Property Act 1925.
http://www.legislation.gov.uk/ukpga/...20/section/121

The current outstanding amount is £386.46 (this includes two Admin charges of £72.00 each). And solicitor has added their fees of £480.00 on this outstanding payment.

I am happy to pay the outstanding amount but the legal fees £480.00 for issuing section 121 looks unreasonable.

So here are some questions in my mind and i hope you could provide your perspective.

1. Can I directly pay the invoice to management agency and then inform the solicitor that the payment has been done?
2. How do I contest this legal fees claim?
3. Is there something I can do about the two Admin charges?

Thanks in advance for your time and help.

[andydd]

For the guy I'm helping I was suprised the FH did include the Summary and with the updated wording, but pity they didnt check the font requirements, as its way smaller that point 10.

[leaseholdanswers]

Well worth a read those stickies...

I cannot find anything in our lease that makes provision for late payment fee in case of non or late payment of SC.
It however refers to forfeiture in case of delay of more than 21 days after the rent is due. I take it, this is ground rent?

Our previous MA charged leaseholders late payment fees for non payment of ground rent and SC. Can this be challenged?

I would have to see the exact wording but charges which are admin charges (includes legal costs and late payment fees) should have been invoiced with the summary of rights for admin charges ( and I bet the daily donut, for a week they weren't) and can be determined by the FTT
http://www.lease-advice.org/publicat...nt.asp?item=89
http://www.legislation.gov.uk/ukpga/2002/15/schedule/11

[andydd]

Think this should be on a new thead.

I'm helping someopne with the same issue, the Freeholder has written back pointing to the S146 Forfeiture clause to justify GR late payment/admin charges, this 'trick' is often used by FHs, what they are saying is that beacuse you didnt pay service charges or ground rent on time that they started or 'contemplated' going down the S146/Forfeiture route for breach of lease and that therefore any charges/costs are recoverable (even the the lease doesnt have a specific clause).

LVT's are not surprisngly split on tjhis witha multitude of contradictory decisions, but most do conclude that to use the S146/Forfeiture clause to recover costs then the FH does have to serioulsy start down this route not just point to it later in an attempt to recover costs/admin charges.

In any event arrears of ground rent only dont technically require a S146 Notice so therefore there cant be any associated costs.

Of course it is impossible for a FH to be successful on the forfeiture route if the amount is less than £350.

i found this article helpful > http://www.practicalconveyancing.co....t/view/8926/0/

And yes previous charges could be challanged on whether they are payable at all or reasonable in amount, as long as you havnt done anything that could be construed as admitting them (normally just paying isnt enough)

[Carine]

Well worth a read those stickies...

I cannot find anything in our lease that makes provision for late payment fee in case of non or late payment of SC.
It however refers to forfeiture in case of delay of more than 21 days after the rent is due. I take it, this is ground rent?

Our previous MA charged leaseholders late payment fees for non payment of ground rent and SC. Can this be challenged?

[leaseholdanswers]

Note the changes to the notices as the above links to legislation .gov are not alwatys quickly updated.

http://www.lease-advice.org/news/story/?item=155

[leaseholdanswers]

Rule 5: Although put in different terms, as a principle, any legal costs are irrecoverable if the earlier demands have not inculded the information or format as each right prescribes.

It is common that when the information is provided that the fees will still be needed to be paid. It is important to assert this right, and offer to pay by return on receipt of a valid demand/info, less fess ,and that should the fees not be cancelled or the payment not accepted, that you will apply to the LVT to have their payability and reasonableness determined.

[leaseholdanswers]

Some Landlords Freeholders and Agents aggressively target these fees to increase income with direct charges or via a Debt Collection Agency or standard Solicitor’s letter. They are also neccesarily sent where Leasholders don’t pay or failed to provide, sometimes intentionally, an address if they don’t live at the property.

Rule 1: Check that the invoice is in accordance with the lease in terms of timing and amount.
Rule 2: It comes with the correct statutory Information , Section 166 CLRA 2002 for Groundr Rent, the correct Summary of Rights for Service Charge or Admin Charges ( which these fees are) and the Landlord’s name and actual address in England & Wales
http://www.legislation.gov.uk/ukpga/2002/15/section/166
http://www.legislation.gov.uk/uksi/2...ulation/3/made
http://www.legislation.gov.uk/uksi/2.../contents/made
http://www.legislation.gov.uk/ukpga/1987/31/section/47
.
Otherwise as in each case the amount can be withheld
Rule 3: At this stage, these charges are only be due if the lease allows for them to be charged and either check your lease or write and ask “under what section(s) of the lease are these charges due”

Lease wordings do vary so each case has to be treated on its own merit but in most case the wording has to be quite broad to allow for these to be recovered.

When presented with a demand it is important to
-respond and assert those rights to avoid legal action being taken and the time and effort of dealing with that
-where threats of contacting a mortgagee are made advise them that there is a dispute and copy your letter to them
-if there is an underlying dispute address that immediately
-ensure all comms are recorded and acknowledged

Where the reply, if you get one, is unsatisfactory, disputes can be dealt with by mediation arbitration or for the determination of a charge ( a late payment fee as a Admin charges or Service charge being due and reasonable, apply to the Leasehold Valuation Tribunal to determine it. As a broad rule it is cheaper for the Leaseholder to apply than wait for the LL to do so as it robs them of the chance to recover costs under the lease by initiating proceedings.
That said in most cases these late payment charges, and most importantly the hassle, are avoidable, like speeding fines if you don’t speed you don’t get fined.

Forget the current lazy thinking about bills and protect yourself
-diarise the due dates of bills and chase when not received
If you pay by DD or SO make sure its taken

Check any invoices or statements as leases are complex, and assuming its all covered is reckless as
-there are often more than one party involved eg a Landlord and an Agent acting for the Residents Man Co
-charges are not lumped into one as no matter how much we think they should be, the lease, drafted by the Freeholder, not the poor Agent, who like you, is stuck with the lease they sold, and they can set out that extra charges may be made over and above an SO/DD e.g. Ground rent Insurance rents, one off levies and year end deficit charges.


Rule 4 Don’t let it go, solve it. It rarely goes away and ends up being a problem when you come to need something!