What action next against a Freeholder ?

[BlueMystery]

I own a 999 year lease on a flat along with 6 owners of the other flats in a converted house.

Nothing but problems with the Freeholder who also managed the property - the following is a summary

What should we do to start some form of action against him - the leaseholders dont want to form a RTM whilst so many complaints are outstanding and money held by Freeholder as we all feel conned by the way he has lied and sold all the properties

All 7 flats have been sold off in the past 15 months - he stopped managing the property after the last flat sold. Incredibly the paperwork for solicitors he prepared for the first sale was allowed to be used for all subsequent sales over the next 15 months without changing a word

He does not respond to any emails now, and an offer to buy the Freehold has been issued by a company on his behalf to 6 of the 7 owners - the sum required is inflated to what it is worth.


1. Ground Rent (Lease Agreement s1)

Legality of amounts charged, administration paperwork issued, format used, method of issue. ** emailing invoices with no contact information and incorrect amounts***

2. Trading Accounts

Lack of proper Audited Trading accounts being available for the past 5 years with supporting documentation. (Sections 21 and 22 of the Landlord and Tenant Act 1985). ***refused to comply****

3. Administration of the Maintenance Reserve Fund. ***refusal to hand over a large credit balance if we go RTM***

4. Pre- purchase Form TA6 - falsely completed on a sale. ** lies told about electrical work***

5. Pre-purchase Form TA7 - incorrectly completed with misleading information **as above just came to light**

6. Insurance of the entire Freehold property

Renewal paperwork and schedules not provided before renewal, or when requested. (Landlord and Tenant Act 1985)

Notification that there was no intention to renew the policy in 2016. **notified of this by email***

7. Contact information in accordance with the Leasehold Contracts. **moved away not given anyone a current address**

8. Management & Maintenance of the Property. Lease Agreement s5(d, e)

This has been neglected with no response to requests for action or information.

Using an uninsured person on a cash in hand basis to clean the carpets and clearing gutters and drains.

9. Legal Obligations

Email notifications that the Freeholder has no intention of honouring legal obligations, under the Terms of the respective Leasehold Contracts.

Ignoring requests for permissions to action urgent remedial work as per Contracts.

10. Complaint from a Leaseholders tenant with regard communication made to him. **threats to get him evicted as he wouldnt do something for him**

11. Proposed Disposal of Leases to Individuals prior to XYZLtd being appointed. **offered leases to individuals free of charge if take over management**

[andydd]

I would of thought that an rtm would be perfect solution here.

As to many of the points, quite s few are just Ifs so not likely you can do anything about them.

I think you need to ask yourself what is it you want to achieve out of all this ?

If demands for SC and GR are invalid then you have a right to withhold payment, this might bring the FH to his senses.

[BlueMystery]

The problem we face is the majority of the leaseholders feel they have been conned by this individual.

The fact he has lied and totally abused with proof held by leaseholders the various aspects detailed and the fact that he has at least £5000 held in the Maintenance Reserve fund compounds this.

Hence me turning to here and asking - perhaps the threat of taking him to tribunal and the respective fines he could receive might work, but all the owners are against paying him for the freehold further monies having only just purchased from him the leases.

[andydd]

Taking action against a FH is hard as many of us have found out, the FTT of court had no power to fine him so you are mistaken if you think that's the case, you really only have 2 routes, one proving wether you do of don't owe money for sc or gr, you won't be awarded any money and it will no doubt cost you and you'll be worse off or you can sue if he breaches the leases but as I found out even if proven it's hard to point to any actual loss. Are you and other LH s prepared to make application to FTT AND pay the fees which have risen steeply recently.

[BlueMystery]

Hi Andy - thanks for this information its exactly what Im trying to get to the nitty gritty of.

I know from reading around the internet "potential fines" which are cited but none of the information ever seems to give detail as to proceedures etc.

Is there a link you know of where I can find out the FTT fees from so I can report back to the other leaseholders with this information.

From my own point of view its hard to call as I dont have any faith in the justice system in this country at all. So I look at matters in a harder way perhaps than the others do.

I look at it

a) ok he issues invoices by email but with no address or company name on - offences in itself
b) he lied in the selling contracts - but why didnt solicitors pick up on this
c) his advice about not renewing insurance is of concern obviously as is his refusal to manage anymore
d) the remainder of the information is where if there was a just and legal system in existence we could pick him to pieces because he ignores all the legislation

All the leases are well over 900 years to run - so big deal about the freehold we have our protection as well

Ground rent he illegally raised it prior to selling but the solicitors didnt pick up on it - but hey its only £100 per annum and now fixed for the next 20 years or so by the lease.
Maintenance he can only raise costs in a justifiable manner otherwise we can ignore then the onus is on him to use the legal system
Yes he has several thousand pounds in a fund that he refuses to hand over - which coupled with the inflated price of the freehold is a mental killer for all

Whereas if we start a RTM group

Yes we have control over decision making
Insurance is insurance and wont be massively different
Ground rent we would save £100 - wow

But we also

Incur company setup fees
Have to produce annual accounts
Hold meetings and document them
Be aware of all legislation

I actually struggle to see the benefit of doing anything myself as the gain does not seem to balance against the financial outlay


As he had previously illegally offered to individuals the freehold free of charge if they took it all of his hands, I personally would consider that as a solution - but its the benefits of the RTM I question in the above scenarios

[andydd]

If no name address on demands then nothing is payable due to s47/s48 of landlord & tenant act 1987, most of your other issues though appear to not be the fault of the FH but of your solicitor or conveyancer. I don't understand the ground rent issue, you paywhat it says in the lease, this can be changed via deed of variation but both sides would have to agree to this, also rtm would make no difference to this, it would stay the same and still be paid to the FH.

It sounds as if you may have cause to take action against the solicitor for negligence ?.

Search for rpts side to find out about FTT fees, also lease advisory site is helpful.

[BlueMystery]

Thanks Andy

From my reading (obviously I bow to greater knowledge) invoices need to have -- name and address of management / freeholder and be served by post and there are also some key statements that need to be included.

We received an invoice by email - with just the guys name on, and the address of our flats. Bearing in mind he told us he was the management company this is obviously wrong and as you say not payable. I was also under the impression it had to be posted not emailed.

The issue I was trying to explain I think is a combination of freeholder trying it on, and solicitor negligence.

In the paperwork pre-contract, the FH had put for example Ground Rent £75--00, then crossed it through and wrote £100.00 for example again. So on the face of it £100 was payable, but an invoice was never given to the Solicitor for the first year, they just added it onto their own disbursements charges. Nothing was queried about not receiving an actual invoice. Ground rent at the time of starting the purchase was £50.

After completion when things had started to go wrong I was reading the lease carefully - and saw that Ground Rent was reviewable every 30 years only, the 30 years on my particular flat was 18 months away from when we first paid via the solicitor.

Reviewing everyones leases since, it seems that in the 1980's at varying times all the Ground Rents were reviewed and registered in the leases at different dates. Yet he introduced a blanket increase when he thought about selling up.

I do think there was quite a degree of solicitor incompetence but equally disturbing was that solicitors acting for the other 6, after my completion accepted photocopies of the information given to me regarding my flat. No one picked up or queried this, or the ground rent and other issues. Also his own solicitor must be equally culpable surely by using the same documentation over the course of 11 months which was the period between first and last completion.

To expand on the pre-contract issues think it was form TA6 or TA7 - there were specific questions about installations and other work carried out ie electric etc - he out and out lied with his answers as well as contradicting himself - yes the solicitors again negligent, but he was responsible for the completion of the forms.

The whole legal system seems to be a total joke when people like this can get away with so much.

[andydd]

Demands must have name and address of landlord on it, sometimes a management company is party to a lease too (what does your lease say ?), but normally leases are between FH and LH as are the legal and contractual obligations, a management agent is normally just that an agent employed to do the day to day management.

It maybe allowable to send by email (esp if you requested this) but normally it would be by post, a FH may run into problems if asked to prove his emails were delivered,.

I dont understand the GR bit, what does the lease say ? (Have you got a copy ?), this will specify the GR, it cant be changed by simply crossing things out, the Land Registry will hold the original legal binding copy...my FH overcharged me many years (only £25) but I took legal action, the lease clearly showed the correct amount and I won in court and got back the overcharged amounts plus interest which was over a grand.

Ive no idea what TA6/7 forms are so cant comment.

[BlueMystery]

The TA forms are part of the conveyancing process where the seller is asked to confirm a lot of different things

Ref the Ground rent - the lease states clearly it is reviewable every 30 years. It had been last changed to £50 in June 1986 and this was registered with Land Registry at that date - payable January 1987.

This meant therefore the next review would be June 2016 for payable January 2017

In amongst the conveyancing paperwork was a question about Current Ground Rent Payable - therefore £50 as per the lease should have been inserted. However the FH put in £75, then crossed it through and put £100.

The solicitor did not query this at all, and billed me £100 which they included in the cumulative payment to the FH in October 2014, although GR was not due until the January 2015.

The lease words the serving of notices as being by post.


regards

[leasee123]

yes the whole legal system around leasehold property is a joke - don't buy leasehold again. if you have to buy a flat buy share of freehold at the very least.

[andydd]

Sounds to me then that the gr is still £30 then.

[Gordon999]

BlueMystery,

The leasehold system means leaseholders are just long term rental tenants and they do not have any ownership of their property. The lease usually requires payment of annual ground rent and service charge payable to freeholder or its appointed managing agent and the lease is a legal contract enforceable by the Courts .

To enable leaseholders to claim the administration of the service charge account and manage the spending of their own money, the leaseholders must set up a legal body ( RTM ) to claim the right to demand and collect service charge money ( taking away the right from the freeholder). The RTM commences operating going forward from the agreed handover date.

But RTM has no legal right to claim back the unspent service charge money paid to freeholder before the handover date. The leaseholders must claim themselves either via the FTT or make direct claim to the County Court ( Small Claims Court)

[BlueMystery]

Thanks everyone there has now been a significant update I would appreciate guidance on.

1. It transpires that the company who issued the letter to us are not acting as agents for the Freeholder BUT they have been offered the chance to buy it from under us. They were told by the FH he had offered it !!!

NONE of the leaseholders has had a formal letter (is there a specific form that should have been sent). from the FH

We were made aware of this by the company in question, that they have been offered the chance to buy when we copied them in on the formal complaint sent to the Freeholder detailing his many breaches..

** As this is illegal (?) what should we do to scupper them buying from under us.

They elected to answer many of our grievances against the Freeholder who still has not replied, but their responses were belittling and bordering on scaremongering. Citing how lucky we were they were responding as some Management Companies would charge for this, and how others charge for sub-letting - well as we know from our leases themselves this we can ignore.


** They also claim we have no right to see renewal Insurance options from the FH in advance of renewal is this correct

[andydd]

A FH can sell the freehold to anyone but the LHs must be given a chance to buy it first.

The insurance docs must be supplied if asked bug makes sense end FH doesn't have to send them before it's actually insured, that wouldn't make sense.

[BlueMystery]

A FH can sell the freehold to anyone buy the LHs must be given a chance to buy it first.

The insurance docs must be supplied if asked bug makes sense end FH doesn't have to send them before it's actually insured, that wouldn't make sense.

Andy, my key question here is - the Freeholder has not offered the FH to the leaseholders.

He casually offered it free of charge to a couple of them in conversation if "they would take the management off his hands".

That is the extent of it.


The advice we received that we believed was from an Agent offering us the FH, was infact a formal notification from a Company he had offered to sell it to.



* Where do we go next because he has offered it to them how do we oppose it legally - we dont necessarily want to purchase it, but want the many outstanding issues resolved before we can make an educated decision as to whether to buy or not