legal problem with freeholder

glider26

Hi there,

Sorry to bother you with this but I’m looking for free legal advice on a small conveyancing legal matter…

3 months ago we sold my gf’s flat in South London. The freeholder of the property, who is a real piece of work with a reputation for slowing sales down, claimed that there was £312 in “service charge arrears” dating back to before she bought the place in 2001. He had requested this very same amount from the sale back in 2001, it was never paid and the exchange process dragged on for 9 months… It seemed absurd that we should pay this but we didn’t want a relatively small sum to drag out the preparation of the deeds and so we instructed our solicitor to pay up.

We were able to exchange/complete swiftly and within a month of the sale we wrote the freeholder and demanded that he pay us back within 3 weeks or face a “small claim” in the county courts. He didn’t pay, didn’t even reply, so we proceeded with the claim (at a cost of £35). He is now disputing the claim on the grounds that “the arrears attach to the lease of the property rather than the current tenant.”

Is he right? I’d like to know before I take things further (in the shape of a court hearing nowhere close to where we live).

Thanks!

Fire_Fox

IIRC the freeholder is right, you took on the rights and liabilities of the leaseholder when you purchased the place. My conveyancing solicitor wouldn't exchange until the modest service charge arrears on my flat were cleared, so I paid them to get the job done. Why did you not discuss this with your conveyancing solicitor??

This website is excellent for all matters leasehold, note that service charge disputes are not normally addressed at the small claims court but at a Leasehold Valuation Tribunal - not sure if that still holds now you are no longer the leaseholder.
http://www.lease-advice.org/publications/documents/

Richard_Webster

It is also likely that the freeholder will say that because you paid the amount you admitted the liability.

Unfortunately this is a common problem for lessees with shark landlords. They make some spurious charge and then when you refuse to pay they do nothing but just leave it outstanding on their statements. When you come to sell it gets raised again and you are then caught.

You can:

a) go to the LVT to get them to determine the reasonableness of the charge. This could take time and involve losing the sale; or.

b) tell the buyer the charge is spurious. Buyer's solicitor says:
(i) "we don't want to get involved in your dispute so please sort it/pay up
(ii) that's interesting, landlord obviously an unreasonable whatsit, I will tell my client not to buy the flat"; or

c) pay up to avoid the buyer being put off.

glider26

Thank you very much for the advice.

I did discuss this with my solicitor, but as Richard pointed out option c (paying up) was the fastest way forward and is what my solicitor recommended at the time. Of course this landlord shark knew this, hence his little scam...

Is there any point in going to the LVT now, 3 months after the sale? Should I first threaten the landlord with this action and tell him that he can stilll avoid the scrutiny of the LVT (which would include a visit to the building which is in poor condition)? I'd still be very happy to settle out of court for the initial amount claimed (£312).

Thanks.

Fire_Fox

I am not convinced the landlord is scamming you - they asked for the money when you purchased the flat and then again when you sold it, why did you not settle the problem in the six intervening years? Have you read through the very extensive LEASE website yet, especially the article on LVTs?