Service Charges Dispute - Legal Action By Freeholder

propertyman

Right your position is a disastrous one.

If you allow the landlord to initiate proceedings it opens the way for costs to be recovered under the terms of most leases under the "section 146" clause.

If however you respond to PDC and the lender restating your dispute and that in the absence of a reasoned reply from the landlord and that they have opted to avoid responding or ADR eg mediation, you have already applied to the FTT to determine the matters ( service charges and admin charges-the PDC fee- etc).

The reason is that this provides considerable insulation from the landlord’s costs as they cannot recover costs as they have not initiated proceedings- you have.

Don’t forget that any fees from PDC or the landlord or agent in relation to debt collecting must be as said recoverable under the lease and must be accompanied by the summary of rights for admin charges ( which is different to the ones with service charge bills otherwise until they are they are not due. Any proceedings prior to that service are also barred from cost recovery if the summary has not been issued.

Your neighbour can of course join in when they return, and you can ask the T to list both hearings at a similar time.

ethank

Don't give them any further notice. You are being strung along.
Issue your proceedings now.

SeanCo

propertyman wrote: »

Right your position is a disastrous one.

If you allow the landlord to initiate proceedings it opens the way for costs to be recovered under the terms of most leases under the "section 146" clause.

If however you respond to PDC and the lender restating your dispute and that in the absence of a reasoned reply from the landlord and that they have opted to avoid responding or ADR eg mediation, you have already applied to the FTT to determine the matters ( service charges and admin charges-the PDC fee- etc).

The reason is that this provides considerable insulation from the landlord’s costs as they cannot recover costs as they have not initiated proceedings- you have.

Don’t forget that any fees from PDC or the landlord or agent in relation to debt collecting must be as said recoverable under the lease and must be accompanied by the summary of rights for admin charges ( which is different to the ones with service charge bills otherwise until they are they are not due. Any proceedings prior to that service are also barred from cost recovery if the summary has not been issued.

Your neighbour can of course join in when they return, and you can ask the T to list both hearings at a similar time.

Thanks for a comprehensive reply.


One question - surely costs wouldn't be recoverable if they lost. In fact I was assuming that this would actually lay open me claiming my costs?


The point you make about providing the summary of rights for administration charges is indeed useful. They haven't done it!

propertyman

ethank wrote: »

Don't give them any further notice. You are being strung along.
Issue your proceedings now.

Well sort of- make your application and tell them that you have, as that means that they are limited in what action they can take.

They cant go down the section 146 route as the owners is seeking the determination, and only then have the county court route, which will happily defer until the FTT rule, and then the landlord only has very limited avenues for their costs.

propertyman

SeanCo wrote: »

Thanks for a comprehensive reply.
One question - surely costs wouldn't be recoverable if they lost. In fact I was assuming that this would actually lay open me claiming my costs?
The point you make about providing the summary of rights for administration charges is indeed useful. They haven't done it!

Its a common mistake. You should reply and state that you are exercising your right to withhold payment of those costs, and keep it to yourself, and spring it on them in your application to the FTT.

Do have ready http://www.legislation.gov.uk/ukpga/1985/70/section/21B para 4 which shows that any costs incurred prior to compliance are barred.

Sorry but no its not as simple as that - costs are recoverable, win or lose, thought they can be limited by the T under section 20c LTA 1985 or in your application asking for any costs claimed to be determined under CLRA sch 11-admin charges.

Good luck

SeanCo

propertyman wrote: »

Its a common mistake. You should reply and state that you are exercising your right to withhold payment of those costs, and keep it to yourself, and spring it on them in your application to the FTT.

Do have ready http://www.legislation.gov.uk/ukpga/1985/70/section/21B para 4 which shows that any costs incurred prior to compliance are barred.

Sorry but no its not as simple as that - costs are recoverable, win or lose, thought they can be limited by the T under section 20c LTA 1985 or in your application asking for any costs claimed to be determined under CLRA sch 11-admin charges.

Good luck

The reference for Sec 21B Para 4 is very useful. I was intending to remain silent following your initial post.


I am aware of Sec 20c etc and would be fully intending to utilise it.


Fortunately I have a reasonable grounding in law as a by-product of my job. Lease and another lawyer reviewed the main case (which has been properly substantiated to FTT standards) and both agreed it was very sound, this probably explains the lack of rebuttal. Your more hands-on guidance regarding process has however been very useful.

propertyman

SeanCo wrote: »

Your more hands-on guidance regarding process has however been very useful.

Most welcome- a good argument is one thing, litigatiing it is another.

The most important thing to understand as an owner or advisor is that in most cases it is benefcial to the owner to exercise rights that they have and inititate action, especialy when it comes to costs.

SeanCo

Unfortunately I need to reopen this sorry case...

As wisely suggested on here I opened a pre-emptive claim at the FTT. On the eve of the tribunal hearing, the freeholder offered to settle out of court through a compromise agreement for 50% of my claim. I accepted this as despite having a strong case overall, there were a few more speculative elements and to be honest certainty and timeliness were important considerations.

Despite the compromise agreement stating that matters would be settled financially within 14 days, no payment was received from the freeholder and my reminders were ignored. Four weeks ago the freeholder invoiced the annual insurance charge. I wrote back to them quoting the compromise agreement and stating that I required them to offset the unpaid amount against the insurance invoice effectively cancelling it out.

This however was ignored and they are now sending the standard template threatening letter (forfeiture, county court etc) regarding the insurance charge. What should my next steps be?