Park owner NOT paying GUARANTEED rentals to lodge owners

mackiess

We own a lodge on a holiday park and we enter each year into a guaranteed rental scheme where we give the lodge back to the park for 26 weeks and each quarter we are paid the guaranteed rentals. We should have been paid in Sept 2012 and the park owner has now turned around and said that they could not pay because the banks have withdrawn the overdraft. They have sent out no communication and can't give a time-frame of when we will be paid.

In the meantime throughout the year, holiday makers have been staying in our lodge and paying the money to the park. Has anyone else experienced this? What are your thoughts on where we stand legally?

kingstreet

It appears the park owners are having financial difficulties.

The guarantee you mention is worthless if the owners are unable to pay their bills. Presumably, the money was not kept in a "ring-fenced" account and formed part of the park's usual income, despite it being for onward transmission to the holiday-home owner.

I suggest a half hour free visit to a local solicitor if you are getting no communication from the park owners. Legally, you are one of the firm's unsecured creditors if the firm goes into liquidation.

mackiess

Many thanks for the information. The legal route is not something that I wanted to pursue but with his non communication in writing, no apology whatsoever, the fact that he has entirely blamed this on the banks leaves me no choice as it is a substantial amount that he owes. His website is still stating the guaranteed rental scheme and business is still carrying on as usual as if this matter doesn't exist.

I believe there are many lodge owners in this position. It was suggested that whoever pesters the most will move to the top of the list to be paid - what a way to run a business! Alternatively maybe other owners have been paid?

Whilst I tried not to rely on the income, unfortunately I did this time and as work is quiet for me that money would have ensured that I went into the New Year with no debts - that is now not the case and he doesn't seem to register this at all.

I will be putting the lodge up for sale in the New Year as half the promised plans for the site have not come to fruition and he never pays the rentals every quarter and there is now speculation that they will only be paid once a year.

We are having this issue at a park in North Devon.

Yorkie1

Are you obliged to enter the rental guarantee scheme? Any way of getting out of it?

In my view you should be revealing this information to prospective buyers so they can make an informed decision whether to buy. If they are legally obliged to offer the lodge up to the owner for half of the year, in return for the reality of no income, that is relevant for them.

spacey2012

You should speak to a solicitor ASAP.
If you have a tip they are in difficulties ask the solicitor to serve a statutory demand upon the firm for what you are owed, jumping the queue.
A bit cruel on the rest, but thats life.
Or you can play fair, hope nobody else serves one and join the queue for your share of what's left.

mackiess

Many thanks for all your replies.

We bought the lodge as an investment and because of the guaranteed rental scheme we were offered. The park owner says that we cannot rent the lodge out independently as he does not want several different management companies on site etc.

Apart from no written communication, we have not even been offered any incremental payments or time frame of payment.

We are having this issue up at Mullacott Park, Devon. If there any other lodge owners experiencing the same issue it would be nice to hear from you.

adouglasmhor

mackiess wrote: »

Many thanks for all your replies.

We bought the lodge as an investment and because of the guaranteed rental scheme we were offered. The park owner says that we cannot rent the lodge out independently as he does not want several different management companies on site etc.

Apart from no written communication, we have not even been offered any incremental payments or time frame of payment.

We are having this issue up at Mullacott Park, Devon. If there any other lodge owners experiencing the same issue it would be nice to hear from you.

See a solicitor, if site owner can not meet his contractual obligations there should be nothing to stop you renting privately. He has efectively broken the contract not you.

spacey2012

What does the contract say in regards to payment ?
Estimate and invoice, then instruct your solicitor read the contract and if appropriate to serve a Statutory Demand for the amount.
They will have a very basic choice, pay you what you are owed or go bankrupt very quickly.

Thrugelmir

mackiess wrote: »

We should have been paid in Sept 2012 and the park owner has now turned around and said that they could not pay because the banks have withdrawn the overdraft. They have sent out no communication and can't give a time-frame of when we will be paid.

I would fear the worst. Would appear that the bank is limiting it's potential losses.

If its operated by a limited company. Suggest you obtain copy of accounts from companies house. Only cost a few £'s. Better than throwing away money on a solicitor.

Thrugelmir

mackiess wrote: »

Apart from no written communication, we have not even been offered any incremental payments or time frame of payment.

If there's no cash in the kitty. There's nothing to distribute.

Christmas is often the time when a business fails as cashflow is at its worst.

spacey2012

Thrugelmir wrote: »

If there's no cash in the kitty. There's nothing to distribute.

I would not worry abut the distribute, just getting mine.
If they can not meet the statutory demand, they go bankrupt, at least it draws a line under the losses.
However, once faced with the prospect of imminent bankruptcy, they may pay off the statutory demand to buy time from bankruptcy.
They are a very cruel and hard way of getting what you are owed, but if the OP wants their money, its the best option.
Or they can worry about everyone else.
I know if I were owed, it would be getting served this afternoon.
Let the others worry about themselves.
They Either pay it or they go bankrupt.
It's a simple two choice option.
It is best served by a solicitor as one part needs to be filed at court correctly , many solicitors have fixed fee's for serving them.