Friend in dire financial situation

Oldernotwiser

inspirespirit wrote: »

Is she getting Income Support? If she is getting Housing Benefit and Council Tax I assume she is.
.

On what basis would you think that she's eligible for IS?

Oldernotwiser

skintandscared wrote: »

I don't believe that if she owns the flat the management company will actually be able to turf her out just because she hasn't paid the maintenance payments. I'd imagine the worst that could happen would be they would pursue her for payment, maybe agreeing to a payment plan? The amount involved sounds like a (hefty!) year's payments.

When I owned a flat, some people were WAY behind with their maintenance payments, but the management company had no actual power to turf them out.

I agree. I used to be the secretary for our Leaseholders group and I was once nearly a year in arreas and others were often late as well. It really depends whether there's any big maintenance work in the offing and, of course, you can't sell the property until the arrears are repaid.

Of course, a commercial management company might not be so lenient.

Oldernotwiser

FarmerGilesUK wrote: »

@Skintandscared (and others) - Thanks for clarifying that one. The issue of being chucked out is terrifying her - she thinks she will have to use her savings and first month's benefits to pay off the service charge leaving £30 to last the month (really NOT doable). I'll advise my friend to go see one of the advice services asap.

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I think that, if she's got savings, she might be better to at least be prepared to use them to pay the arrears of the maintennace if things get tricky.

By the way, JSA is paid fortnightly, not monthly.

viktory

skintandscared wrote: »

I don't believe that if she owns the flat the management company will actually be able to turf her out just because she hasn't paid the maintenance payments. I'd imagine the worst that could happen would be they would pursue her for payment, maybe agreeing to a payment plan? The amount involved sounds like a (hefty!) year's payments.

When I owned a flat, some people were WAY behind with their maintenance payments, but the management company had no actual power to turf them out.

Yes, they can. Under the terms of her lease, if she fails to pay her service charge (including any charges for major works) the freeholder can forfeit the lease. If that happens, she loses her home. It is unlikely to happen though. Where I work (in income recovery for leaseholder services), I would try and make an agreement with the leaseholder. If the leaseholder failed to make an agreement or defaulted, I'd refer to court. Once a CCJ has been obtained we can then press for forfeiture, if we think this is the best course of action. We can also apply for bankruptcy, write to the leaseholder's mortgage company or apply for a charging order.

She needs to contact the management company and made an agreement with them. She also needs to contact the DWP - I know for a fact that they pay the majority of the service charge and ground rent if the leaseholder is on receipt of means tested benefits (not sure if there is a qualifying period). She'll need copies of her most recent estimated cost of services and also any invoices she's received. The DWP have also been known to pay major works bill of leaseholders on benefits. One leaseholder was given £10k for a major works bill.

skintandscared_2

viktory wrote: »

Yes, they can. Under the terms of her lease, if she fails to pay her service charge (including any charges for major works) the freeholder can forfeit the lease. If that happens, she loses her home. It is unlikely to happen though. Where I work (in income recovery for leaseholder services), I would try and make an agreement with the leaseholder. If the leaseholder failed to make an agreement or defaulted, I'd refer to court. Once a CCJ has been obtained we can then press for forfeiture, if we think this is the best course of action. We can also apply for bankruptcy, write to the leaseholder's mortgage company or apply for a charging order.

She needs to contact the management company and made an agreement with them. She also needs to contact the DWP - I know for a fact that they pay the majority of the service charge and ground rent if the leaseholder is on receipt of means tested benefits (not sure if there is a qualifying period). She'll need copies of her most recent estimated cost of services and also any invoices she's received. The DWP have also been known to pay major works bill of leaseholders on benefits. One leaseholder was given £10k for a major works bill.

But in MOST cases where managing agents are involved, and service charges are payable, it is a block of properties involved and it's hugely unlikely that a freeholder would take such drastic action over ONE overdue service payment. It's already been stated that the OP's friend should contact the management company and make an arrangement for payment. Her main worry is being kicked out of the property (which she owns outright) and I honestly don't believe that would happen.

Sam____2

surely she would have some belongings she could sell to raise the funds, phone, laptop etc?

viktory

skintandscared wrote: »

But in MOST cases where managing agents are involved, and service charges are payable, it is a block of properties involved and it's hugely unlikely that a freeholder would take such drastic action over ONE overdue service payment. It's already been stated that the OP's friend should contact the management company and make an arrangement for payment. Her main worry is being kicked out of the property (which she owns outright) and I honestly don't believe that would happen.

If you read my post again, you will note that I did say it is unlikely but not out of the question. I had to clarify this as you said you did not believe it would happen. It is important that all leaseholders are aware of the potential risk of not paying the service charges. I also advised that the OP's friend makes an agreement as soon as possible. Being on benefit is not an excuse not to pay. Service charges are priority debts and should be treated as such.

All leaseholder properties are in a block of some description and persistent non payers can and do have their leases forfeited. We also don't know how many quarters the OP's friend is overdue. It is likely to be more than one. We take action when two quarters are overdue.

Ames wrote: »

Basically, while she's on JSA her income isn't high enough to cover debt repayments, so she needs to make an arrangement to pay a nominal sum (probably £1 a month) until she gets a job and can make an arrangement to pay which will clear the arrears in a reasonble timeframe.

Again, she needs to contact the DWP as they will pay some (most) of the services charges while she is on means tested benefits. There may be a qualifying period and they won't pay arrears.

Please note that an agreement for a nominal sum is very likely to be rejected. Service charges are PRIORITY debts and as such must be up there with the mortgage and council tax. Speaking as one who works for a massive leasehold department, I can tell you that we do not accept nominal payments and service charges are ongoing - they will not stop just because someone is in receipt of benefits.

When we refer a leaseholder that has defaulted we receive judgement for the full amount. Any offer that does not cover the full monthly charge plus a reasonable sum off the arrears is rejected.

FarmerGilesUK

Many thanks for all you advice. I've passed the info on to her and she sounded much more positive.

Regards all

Ames

viktory wrote: »

If you read my post again, you will note that I did say it is unlikely but not out of the question. I had to clarify this as you said you did not believe it would happen. It is important that all leaseholders are aware of the potential risk of not paying the service charges. I also advised that the OP's friend makes an agreement as soon as possible. Being on benefit is not an excuse not to pay. Service charges are priority debts and should be treated as such.

All leaseholder properties are in a block of some description and persistent non payers can and do have their leases forfeited. We also don't know how many quarters the OP's friend is overdue. It is likely to be more than one. We take action when two quarters are overdue.



Again, she needs to contact the DWP as they will pay some (most) of the services charges while she is on means tested benefits. There may be a qualifying period and they won't pay arrears.

Please note that an agreement for a nominal sum is very likely to be rejected. Service charges are PRIORITY debts and as such must be up there with the mortgage and council tax. Speaking as one who works for a massive leasehold department, I can tell you that we do not accept nominal payments and service charges are ongoing - they will not stop just because someone is in receipt of benefits.

When we refer a leaseholder that has defaulted we receive judgement for the full amount. Any offer that does not cover the full monthly charge plus a reasonable sum off the arrears is rejected.

Sorry, I was replying based on what others had said about it being a non priority debt.

As it is a priority debt then yes, an agreement needs to be made soon for a realistic amount.

ceridwen

OP - I know you have stated this is a one bedroom flat - ie no spare room available to let out.

However - what I am wondering is whether the layout of the flat is such that it would lend itself to turning the sitting room into a bedsit and the bedroom into another bedsit. That is - one bedsit for a lodger and one bedsit for herself.

It may be that the layout makes this totally impossible - ie having to walk through sitting room to get to kitchen or something? I know that I've had such a flat before now and the "bedroom" was an alcove off the sitting room and there were other aspects of the layout that made it impossible. But if both rooms come off a central corridor then it would be possible.

She wouldnt be allowed to keep all the rent - the DWP would deduct some of it from her by paying her less benefit than she would otherwise have. She could keep some of it though - particularly if she provides any meals (ie providing a continental breakfast included in the rent would mean she could keep a higher proportion of the rent).