Legal fees incurred for chasing service charge arrears - help needed please

fabster989

HI all, apologies if this is not the right forum in which to post this, I couldn't see a section for legal advice so hoping someone on here can help. 

I am a leaseholder of a flat and have received a solicitors letter (from what looks like the debt collection arm of a solicitors firm), requesting payment from me in connection to outstanding service charges (which have now been paid directly to the managing agent/freeholder) but the solicitor is now pursuing me for legal fees (£420) incurred in chasing the outstanding service charges and is threatening court proceedings against me.

My dispute is that the charges of £420 for sending 2 letters are unreasonable on the part of the solicitor when a reminder for payment or email from the managing agent to me would have sufficed, I did not receive any reminder letters for the outstanding service charge amounts from the managing agent and one of the invoices was paid three weeks after issue of invoice. There is a clause in my lease that states the managing agent can recoup legal costs that they incur, from the leaseholder, however.

I would be happy to offer a reduced amount to pay for the legal fees to avoid any court action. Any advice is greatly appreciated.

I have also contacted LEASE-advice and awaiting a response but I think their timeframes are quite long and I only have seven days in which to respond.

Thank you.

eddddy

The law says Service Charges must be 'reasonable' - so 'Late Fees' and 'Solicitor's Fees' and 'Debt Collection Fees' must be reasonable.

But there's no strict legal definition of what 'reasonable' means. Ultimately, you'd have to go to a tribunal to argue your case, and the Tribunal would decide whether the fees charged are 'reasonable'.


Lease-advice generally advise that you pay the fees under protest - and then challenge them at a tribunal. If you don't pay them, further legal fees etc might be piled on top. Then if you lose at tribunal, you have to pay the whole lot.

At least if you pay now, no further fees will be added to the service charge - even if you lose at tribunal.


If you want, you could write to the freeholder / managing agent something like this:

"Without Prejudice.
I do not accept that the charge of £420 for legal fees is reasonable (as required by the Landlord and Tenant act 1985). However, I am prepared to pay a charge of £x to settle this matter. If you insist that a charge of £420 is due, I will pay it under protest and challenge it at a tribunal"


Some freeholders might give in, or they might call your bluff, etc

fabster989

Thank you so much for this, very much appreciated!

comeandgo

Considering solicitor fees are in the £200 an hour range then I don’t think your costs are that bad.

user1977

comeandgo said:

Considering solicitor fees are in the £200 an hour range then I don’t think your costs are that bad.

Except no normal creditor would be paying for two hours of solicitor time just to send a reminder for an invoice.

princeofpounds

Before you pay the fees, check and make sure that the service charge was properly demanded.

See section 4.1 here - particularly note the part about the summary of rights and obligations which would be easy to omit.

https://www.lease-advice.org/advice-guide/service-charges-other-issues/

Otherwise, eddddy has basically told you what you need to know.

csgohan4

arkell vs pressdram