Neighbours debt passing to me??

Recoil101

Not sure if this is the right right forum but it's to do with the factors for my property....

The situation is this :- I live in a flat in Edinburgh, I pay a factor's fee twice yearly to a management company who organise the communal buildings insurance, stairwell lighting, communal garden maintenance etc. Today I received a letter from them concerning a neighbour (not on my stairwell but in the stairwell next door), who has not been paying their fees. Their debt has now risen to almost £2,000 and the factor is saying that if they dont pay, then I and other residents will have to pay it instead. I was outraged by this! Before I contact them to ask for clarification on this I was interested to know if anyone had any legal information/advice that might be useful to me on this matter. Forewarned is forearmed.

It would seem that the factor has little info on the resident, only their name and the address, which I'm presuming is vacant. My first question for the factor would be - Have you enquired whether this person been paying council tax? If so, then surely the council have details on who this person is and where their main residence is? My second would be - have you checked the Scottish Land Registry to see which solicitors dealt with the purchase on the owners behalf? Surely they would have some information...

Any ideas??

many thanks

Jowo_2

The Shelter Scotland website has excellent info on disputes over common fees between neighbours/Factors.

If the flat is vacant, and used to be let out, there could be information on the Scottish landlord registration website.

I've received copies of land registry deeds from Registers Scotland and while it meantions the lender, I have no recollection of any solicitor information on them. You can get the deeds for about £8.

I doubt that council tax people will give any information to enquiries made about the address with anyone other than the name on the account.

I'm aware that in Glasgow, Factors have pulled out of buildings where there are significant arrears which means the property then becomes unmanaged and uninsured unless the owners form their own owners association, which is difficult when neighbours won't cooperate with it.

http://scotland.shelter.org.uk/getadvice/advice_topics/repairs_and_bad_conditions/repairs_and_maintenance_in_common_areas/paying_for_common_repairs

http://scotland.shelter.org.uk/getadvice/advice_topics/repairs_and_bad_conditions/repairs_and_maintenance_in_common_areas/property_managers_and_factors

http://scotland.shelter.org.uk/getadvice/advice_topics/repairs_and_bad_conditions/repairs_and_maintenance_in_common_areas/responsibility_for_repairs_and_maintenance_in_common_areas

What if another owner doesn't pay their share?

If an owner can't pay their share of the costs (for example, because they're on a very low income), the other owners can make a scheme decision to let them off and divide the share between themselves. ...
If the owner is just being difficult, ask your solicitor to write them a letter, pointing out their duties under the provisions of their title deeds or the tenement management scheme and explaining that they can be taken to court if they don't pay up. Your solicitor should point out that even if the owner doesn't want the repair work to be carried out, they are legally bound to pay their share if the decision was made in accordance with the title deeds or the TMS. This may be enough to persuade them to hand over the money.
If an owner doesn't pay their share because they're out of the country or have gone bankrupt, the other owners will probably have to cover their share, but the non-payer will remain liable for the money. If they refuse to pay, any of the other owners have the right to try to reclaim the money by taking the non-payer to court using the small claims procedure (if the sum is less than £3,000) or summary cause procedure (if the sum is between £3,000 and £5,000)."

Recoil101

Thanks for that Jowo, excellent info.

I suppose my main bugbear is that I don't believe it is morally acceptable (though I accept that it is legal) for the factors to say to me "Your neighbour owes us a lot of money so if you can find him and persuade him to pay up then we won't pass his debt onto you." I believe that it should be THEIR responsibility to find him and not mine. If they take all possible action and still cant locate him, then fair enough, I (and other neighbours) will have to start paying his fees for him.

I've now checked the land registry info online, and the current owner bought the flat when they were built 12 years ago, doesn't give me any info that would help me to find them though.

Ah! that last bit is interesting! So if we pay the debt now... and the current owner trys to sell the property in the future we might be able to take them to court to recover the money from the sale???

Jowo_2

Have you even called round there to see if its occupied or talked to the direct neighbours about it?

If their name isn't too common, you could do a search on 192.com or a similar site to see if you can trace them. Or if its a buy to let property, the deeds could reference another residential address (not sure if it will, though).

Look into a notice of liability (or note of liability, I can't quite remember) - this is where a note goes against the deeds for 5 years which forces either the seller or buyer to settle the debt. You do this with Registers Scotland but I found the form too complicated.

We have a non-paying absent owner in our tenement and our Factor placed a notice of liability against it and then billed the owner for it, too - they did the legwork. The factor even included money owed to the owners in the years before they took over the account. I'm not even sure that you need a court order to put the notice against the deeds - perhaps your factor or Shelter will know.

Many Factors also take stingy owners to the sheriff court, too. However, the empty flat in our block is likely to be repossessed so I don't know where we stand when it does go back to the lender. Has your Factor already done this to no avail and that's why he's seeking payment for the other owners?

Sack your Factor and get another if they aren't doing enough work in your opinion to hold that owner to account. However, when we appointed ours, a number of other Factors wouldn't accept the account because of the non-cooperating owner...

Jowo_2

Recoil101 wrote: »

I've now checked the land registry info online, and the current owner bought the flat when they were built 12 years ago, doesn't give me any info that would help me to find them though.

Registers Scotland now offer deeds online? I used to have to apply by phone and get sent them in the post a week later.

maria6259

"I suppose my main bugbear is that I don't believe it is morally acceptable (though I accept that it is legal) for the factors to say to me "Your neighbour owes us a lot of money so if you can find him and persuade him to pay up then we won't pass his debt onto you." I believe that it should be THEIR responsibility to find him and not mine. If they take all possible action and still cant locate him, then fair enough, I (and other neighbours) will have to start paying his fees for him. "

It isn't morally acceptable but I think this is common practice. There is insurance you can take out that covers for situations like this. It might be worth looking into this for the future (sorry, I know it doesn't help now)!
Good luck

Jowo_2

Yes, it's gutting so far better that the owners motivate themselves to address the debt if the Factor is slopey shouldered and find a better one.

However, the owners have to appreciate that a business cannot operate if its not being paid - I should think a significant arrear from a single owner is enough to wipe out the profit for the Factor who unsurprisingly doesn't want to offer their professional property management expertise for free.

Call a meeting to discuss how to handle the arrears and a strategy for finding a new Factor.

I've self-factored before and there's absolutely no way I would ever run a tenement management scheme again - it was a nightmare.

Ignite

I don't know how it operates in Scotland but I have heard of the mortgage company being approached about arrears. This normally gets the ball moving as they will forward this onto the owner and also charge them a fee for doing so.