Help with ideas for dealing with legal action for ground rent

littly_kitty

My elderly uncle owns a maisonette, but he has to pay ground rent as he doesn't own the land. The ground rent company were supposed to do some maintenance but never did so my uncle withheld payment. It took a few years, but they finally did the work, so my uncle paid a lump sum to settle all the outstanding years when he withheld. He then sent an email to confirm that he had paid. 30 days later he went on a months holiday. When he came back he found that the ground rent company have passed the matters to debt collector and he now has a court date.

Apparently, he had paid the lump sum into the ground rent company's old bank account and not seen that the money had been returned. They had sent him an email to chase up the payment while he was on holiday and because he couldn't access his emails and failed to reply, they took legal action.

He has tried explaining the situation, but they aren't listening.

Does he have any options? He's quite old and doesn't live in the property (he rents it out). The court is near the property, but it's miles away from where he lives and so it's not very practical for him to go to court. But ideally, he would like to resolve this, so it doesn't go to court.

He's tried looking for a lawyer, but their fees are too much. And also, he doesn't see why he should have to pay to resolve it, as it was just an honest mistake.

Thanks!

lisyloo

He is runnning a business as a landlord, so I expect excuses about being old, not living near by, not arranging to monitor emails, not having legal ins, renting a property where he doesn’t live are going to fall on deaf ears.

What type of court is it?

I’m asking because he might be able to move it near him.

Has he checked whether he has legal insurance? Possibly as part of buidlings/contents cover? It’s worth checking?

Can he now pay and cancel the court? He might have to pay fees but this could minimise them. People do settle before court hearings.

Just a warning don’t expect sympathy here, he’s running a business and should have been aware of the risks.

littly_kitty

@lisyloo Thanks for your help.

Oh wait, sorry, I got it a bit wrong. He's rents out the property, but it's to his daughter. Basically, she just pays the mortgage. It's not a proper rent (They don't have a tenancy agreement or anything and he's not making a profit). I don't think the ground rent people would count it as a tenancy.

lisyloo wrote: »

What type of court is it?

It's a county court.

lisyloo wrote: »

Can he now pay and cancel the court? He might have to pay fees but this could minimise them. People do settle before court hearings.

He paid the outstanding rent, but not the debt collectors fees. The debt collector seems unwilling to listen to anything he has to say.

lisyloo

He is subject to all landlord/tenant law
https://www.thisismoney.co.uk/money/buytolet/article-4487684/Can-let-property-family-member-no-rent.html

His insurance may be invalid.
Does he have a btl mortgage or residential? He may be breaching the terms and conditions there also.

He can apply to move the court location.

I’m not suprised the debt collector is ignoring him. He failed to pay it to the correct account and left his business unmonitored for 30 days.
He has to take responsibilty for paying for that so I don’t think he has a valid defence.

Can you clarify was his given the incorrect payment details? Or did he use old details? If the latter then it’s his responsibility. He shoudl pay up ASAP and try to minimise his losses.

Then he should research his obligations in terms of mortgage, insurance, deposit etc. So he’s no falling foul of any laws.

If he’s too old to run a business then his daughter should buy the house.

G_M

1) he was not entitled to withold payment because of the maintenance issues. He could dispute the maintenance /service costs, but ground rent should always be paid.

2) Paying the wrong bank may mitigate, but does not excuse. He should have paid the amount owed to the correct recipient

3) Being on holiday may mitigate, but does not excuse. He should have paid the amount owed to the correct recipient

4) He may be able to apply to the court to have the hearing moved to a local court. He should speak to the court officials - no solicitor needed for this. If they agree (eg on the phone) get it confirmed in writing.

5) What is the court claim for? How much? Is it
* the ground rent?
* a late payment fee?
* legal fees?
* debt collectors fees?
* court fees?
He will have to pay all these I suspect.

If he reads the court papers he has received it should explain his options eg
1) enter a defense
2) accept liability and pay the amount claimed in full to the court
3) I can't remember what 3 would be!!


I suggest he does option 2 immediately - but the choice is his. He may wish to defend the claim.

6) he may have legal cover with his insurance. If so, use it for advice.

7) he is a landlord. It IS a 'proper tenancy'. Rent is paid and a property provided in return. A tenancy exists (albeit a verbal one). Therefore
a) he should be paying tax on the rent
b) he should have a BTL mortage
c) he may need a freeholder'permission to let the property
d) he should have landlords insurance, not standard domestic insurance
e) he must comply with all tenancy laws.

Read:

* New landlords: advice, information & links

anselld

It is a long shot, but were ground rents demanded in the legally prescribed form?

https://www.lease-advice.org/article/ground-rent-a-demanding-notice/

AdrianC

littly_kitty wrote: »

When he came back he found that the ground rent company have passed the matters to debt collector and he now has a court date.
...
He has tried explaining the situation, but they aren't listening.

He's talking to the wrong people. He needs to talk to the "debt collectors". The freeholder seem to have sold on the debt, as they are perfectly entitled to do.

Does he have any options?
...
The court is near the property, but it's miles away from where he lives and so it's not very practical for him to go to court. But ideally, he would like to resolve this, so it doesn't go to court.

Then he needs to contact the current creditor, and say "I'm really sorry, it's been a mahoosive mistake on my part, and I'd like to pay now to clear the debt. How much do I owe?"

And also, he doesn't see why he should have to pay to resolve it, as it was just an honest mistake.

It's a catalogue of "mistakes" following on from his original deliberate action, a conscious decision to refuse to pay what he owes. It's now at least two months since he accepted that he did indeed owe the money, mucked up paying it, and he still hasn't paid it. There are now other costs he owes on top of that original debt. He needs to pay it ASAP to avoid those costs rising further.

Whether he lets the flat or not is irrelevant - he is the leaseholder.
Whether he is elderly or not is irrelevant.
Whether he went on holiday or not is irrelevant.

littly_kitty

Thanks for all the useful advice. I know he paid the core amount immediately, but I am not sure about the fees that came from it being late. I will ask him. I know he has spoken to both the debt collectors and the ground rent company but not had any luck.

About the tenancy situation: I am not really sure about this. My mum just mentioned that she thought his daughter was actually living there free as he paid off the mortgage years ago (and she remembers lecturing him about this as it was making his daughter less responsible for her fiances). I know he paid of his daughter's extensive credit card debit and she was paying him back, so I might be confusing it with that. I'll tell him that he should treat it like a tenancy if she is paying for the property, as he wouldn't want any more trouble.

littly_kitty

One more question: What's the correct way to handle a ground rent company when they don't do what they are supposed. And does one have a right to buy the land off them?

littly_kitty

Oh, sorry. I was speaking to my mum: My uncle did always pay the ground rent. It was just the service costs he withheld when they didn't do the work. I've never had a house where there is ground rent, so I am not familiar with the terms.

eddddy

Just to be clear, is this...

a) a court claim for a debt?

or

b) the freeholder making a claim for forfeiture of the lease, due to non-payment of service charges?

If it's a), the worst case outcome is a ccj against your uncle.

But if it's b), it's potentially very serious. Your uncle could lose his flat with no compensation. He should consider seeking professional legal advice.