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Ground Rent - debt collection agency threats
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# 1
AlwaysWorking
Old 04-05-2009, 5:20 PM
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Default Ground Rent - debt collection agency threats

Hi, I would be grateful for any thoughts you may have, I'll try to be as brief as possible.

I bought my first house three years ago. I live in Northern Ireland incase that has any bearing on things. In January I got a nasty letter from the estate agent threatening to take me to the small claims court for non payment of ground rent. This was the first I had ever heard of them. The bill was for the last 5 years, so two years before I bought the house. I wrote back, apologising that I hadn't received their previous bills and asking them to amend the bill and I would of course pay at once.

A few weeks later I received a pretty curt response saying that my solicitor should have checked the ground rent was paid up to date when I bought the property and should have told me who to pay ground rent to and how much to pay as they (estate agents) don't send bills. The solicitors firm are no longer in business so I cannot check why none of this was done.

I was made redundant at the end of January and have been struggling to pay my mortgage etc since then. I had forgotten about the ground rent until I mistakenly opened a letter from Scorpion National Credit on Saturday addressed to the previous occupants saying that 'If you fail to make payment for this outstanding credit, Scorpion National Credit will record this payment default and cross reference with other Credit Reference Agencies when:
  • Credit decisions about you, your family and anybody living at your address are being considered
  • Credit applications regarding your business are being considered'.
Should I write explaining that the debt is mine (thanks to my solicitor! ) but that I cannot afford the full amount and offer to pay 10 month? Or will this lead to a default being put on my credit file? Through watching every penny, selling things on ebay and eating at my mum's, I have managed to avoid missing any payments up until now....but simpy cannot pay this all at once.

Thank you for reading this far, I'm sorry for boring you!

p.s my user name was chosen during my previous life when I had a job...
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# 2
urg123
Old 04-05-2009, 5:57 PM
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I'm not sure if I can answer the full question you have got - it must be really frustrating.

Do you still have the original paperwork from when you purchased the property?

I wonder if you can sue your solitictor for not having done his/her job properly. I don't know what you would need to do - not even sure The Law Society has jurisdiction in NI.

Maybe the CAB might be a good place to start in terms of getting immediate advice. They may also be able to help with the issue with your solicitor.

Not sure this is helpful

urg x x
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# 3
Eriberri
Old 04-05-2009, 6:12 PM
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Don't necessarily believe what the estate agent has said either about the solicitor. I have some shared land on my property for which we pay a ground rent (it's in the deeds). I was aware of it when I bought the property in 2005 but never had any demand for it - until I got a strongly worded and threatening letter from a management company last year, demanding 3 years of ground rent payment.

Luckily, my solicitor is also a friend and tutor (I'm doing my LPC at the moment) so I was able to double check with her what was going on. There were things that I remembered vaguely from the conveyance but couldn't recall it properly. Apparently what often happens is things are with one management company, nothing gets done with it, another management company gets the account for it and sends off demanding letters. I paid the three years, because I was liable for it and I didn't mind that - what I objected to was the threatening letter. My solicitor sent payment with a strongly worded letter to the management company, requesting them to send an invoice for the ground rent on a yearly basis.

I don't know if the NI law is different - I would consult a solicitor about it if you can. It would be clear then if the estate agent is correct.
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# 4
Fire Fox
Old 04-05-2009, 11:59 PM
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Quote:
Originally Posted by AlwaysWorking View Post
I bought my first house three years ago. I live in Northern Ireland incase that has any bearing on things. In January I got a nasty letter from the estate agent threatening to take me to the small claims court for non payment of ground rent. This was the first I had ever heard of them. The bill was for the last 5 years, so two years before I bought the house. I wrote back, apologising that I hadn't received their previous bills and asking them to amend the bill and I would of course pay at once.

A few weeks later I received a pretty curt response saying that my solicitor should have checked the ground rent was paid up to date when I bought the property and should have told me who to pay ground rent to and how much to pay as they (estate agents) don't send bills. The solicitors firm are no longer in business so I cannot check why none of this was done.

I was made redundant at the end of January and have been struggling to pay my mortgage etc since then. I had forgotten about the ground rent until I mistakenly opened a letter from Scorpion National Credit on Saturday addressed to the previous occupants saying that 'If you fail to make payment for this outstanding credit, Scorpion National Credit will record this payment default and cross reference with other Credit Reference Agencies when:
  • Credit decisions about you, your family and anybody living at your address are being considered
  • Credit applications regarding your business are being considered'.
Should I write explaining that the debt is mine (thanks to my solicitor! ) but that I cannot afford the full amount and offer to pay 10 month? Or will this lead to a default being put on my credit file?
I am speaking about the English law but I suspect the situation will be similar. Here non-payment of ground rent may lead, in exceptional circumstances to the freeholder taking back possession. You must therefore find the money to pay at least your portion of the bill ASAP.

Here too a solicitor is responsible for checking with the freeholder what service charges and ground rent are due, and getting them paid up to date. As the solicitor was your representative you may find you have to take responsibility for their mistakes - especially given they have gone bust.

I would write and appeal to the freeholders better nature, pointing out that bills have not been addressed to you, hence you had no prior knowledge of this debt. If you have not been properly billed I don't think you are liable until you are in receipt of a proper bill (certainly the case with service charges).
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# 5
RAS
Old 05-05-2009, 5:07 PM
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If the Law Society cover NI, you can ring them up and they will tell you where the business of the solicitors firm has been passed after they closed.

And this is absolute boolocks

"Credit decisions about you, your family and anybody living at your address are being considered "

In fact if this is covered by the OFT, you could make a formal complaint about misleading threats.
The person who has not made a mistake, has made nothing
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# 6
DarkKnight81
Old 28-05-2009, 11:28 AM
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This is the mistake of your solicitor for not completing the research on any outstanding groundwork. The debt recovery agency is only acting on behalf of their client whoever owns the the property, therefore i wouldnt waste time chasing them or making complaints against the debt recovery firm. I would report the solicitors to the law society and contact the estate agency who has sent you these letters explaining your situation and they will understand im sure. Goodluck!
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# 7
Just 1 Cornetto
Old 29-05-2009, 11:59 AM
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Scorpion National Credit - does this company actually exist?? I have a client that received 2 letters from Scorpion and their headed paper was different, with different addresses, web pages and telephone numbers.

One of the web addresses quoted does not exist and the other address is a military defence strategist for Saudi.

The phone numbers did not connect and the postcode for the PO Boxes did not exist.

Worst of all, the companies registration number at the bottom of the company paper was for a separate company - SNC Productions Ltd who deal with marketing etc

Do not rise to these letters, do a proper search of companies claiming your money.

Good luck.
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# 8
RAS
Old 29-05-2009, 1:15 PM
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Well they are certainly not registered with Companies House under that name. Think someone needs to report potential fraud.
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# 9
AlwaysWorking
Old 01-06-2009, 10:12 AM
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Thank you Just 1 Cornetto and RAS.
It never even occured to me that this company could be fake! After reading your posts I tried the number (02891823503) and it doesn't work..and the PO Box post code doesn't exist according to Royal Mail.

But they did know the amount of ground rent I owe and who I owe it to and provided their contact details as well as the fake ones...so could this be an underhand way for the estate agent to get me to pay up? Just 1 Cornetto, could I ask who your client received the letters from? Was it an estate agents from Northern Ireland??

The website was registered by someone who works for an IT firm (googled his name), but he used an address close to his office which doesn't exist...

How strange!
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# 10
Just 1 Cornetto
Old 01-06-2009, 10:36 AM
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The client I was dealing with was a builder who received the debt letter from Scorpion regarding a disputed account with an Electrician based in Coleraine.
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# 11
AlwaysWorking
Old 01-06-2009, 10:56 AM
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They describe themselves as the 'UK's Leading Financial Credit Managment Agency' but don't seem to exist!! Just 1 Cornetto - did you report them or did your client ignore the letters? I wonder is the letter just a template you just buy on line?!
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# 12
DarkKnight81
Old 03-06-2009, 8:20 PM
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Guys, do not worry about this company i think they did exist for a very short period but have closed. I think they were a sole trader therefore would not be listed on Companies House. Their phone numbers and website do not exist therefore they are closed.
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# 13
lijojo
Old 23-06-2009, 11:38 AM
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I live and work in Northern Ireland and have worked for soilcitors. If they go though the courts to collect they can only claim for 6 years backdated ground rent (and then that only applies if your date of completion takes you back 6 years). If you completed say 3 years ago, they can only claim 3 years ground rent. They will have to seek indemnity from the previous owner. Indemnity shoudl be sought from the Vendor to you via their solicitors.

Hope this helps.
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# 14
b4lee
Old 04-03-2010, 7:53 AM
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Quote:
Originally Posted by lijojo View Post
I live and work in Northern Ireland and have worked for soilcitors. If they go though the courts to collect they can only claim for 6 years backdated ground rent (and then that only applies if your date of completion takes you back 6 years). If you completed say 3 years ago, they can only claim 3 years ground rent. They will have to seek indemnity from the previous owner. Indemnity shoudl be sought from the Vendor to you via their solicitors.

Hope this helps.
Hi There, does that mean if I completed in 2001 and they are trying to collect from then until now 2010 that I only have to pay six years of this? and if I do let this go to small claims and I lose do I have to pay their solicitor?
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# 15
never-in-doubt
Old 04-03-2010, 8:05 AM
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Quote:
Originally Posted by b4lee View Post
Hi There, does that mean if I completed in 2001 and they are trying to collect from then until now 2010 that I only have to pay six years of this? and if I do let this go to small claims and I lose do I have to pay their solicitor?
So does this cover the usual limitations then? i.e. limitation act 2000 states debts can only be claimed for 6 years, does this apply here?
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# 16
JasX
Old 04-03-2010, 9:06 AM
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Quote:
Originally Posted by Fire Fox View Post
I am speaking about the English law......

....... I don't think you are liable until you are in receipt of a proper bill (certainly the case with service charges).
It can be very dangerous giving legal advice with only part of the facts. In English law there is a HUGE difference in the legal status of ground rent and service charges.

Basically:

Service charges = lots of protections for the leaseholder, specific rights and prescribed formats in which the freeholder/managing agent needs to bill you before you are liable, protection from non-payment and ability to dispute them in a broad range of circumstances. Limited scope of what the Freeholder can do to recover amounts not paid if they've not done everythign to the letter off the law and followed a stringent proper procedure.

Ground rent = Completly different!! ALWAYS due whether demanded or not, zero (practically) protection for leaseholder for non payment. Technically the Freeholder can very easily terminate the lease for non payment and sieze the entire house back even for relatively small amounts (but not often is this enforced by a court).

There have been several court cases of leaseholders getting into dispute with their freeholder and witholding payment, sadly a fair few where had they only withheld service charges they'd have probably been fine but because they were not paying ground rent too they had no protection from penalty clauses in their lease and lost their house.

I don't know how NI law differs, is there anythign in your Lease/Deeds about ground rent?

Last edited by JasX; 04-03-2010 at 9:10 AM.
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# 17
never-in-doubt
Old 04-03-2010, 10:39 AM
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Have you checked out sites like this for info?

GROUND RENTS ACT (NI) 2001

Ground Rents Act (Northern Ireland) 2001 No. 5

BBC NEWS | UK | N Ireland | Change in ground rents law

Quote:
A leaflet explaining the Act is also available on the Office of Law Reform
website at www.olrni.gov.uk or from the Office of Law Reform on 028 9054 2901
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