Garage Lease

Mathdrab

Hi, Im hoping someone can help. We live in a maisonette with 3 garages underneath which belong to our property, we have access to one of the garages but the other 2 have 999 year leases against them for 2 houses on the estate at £0 per year.

As part of the lease the two houses are required to pay 12.5% each towards the insurance of the building. All has been well for years, however a new family moved into one of the houses 12 months ago and are refusing to pay their contribution. The wording of the lease is beyond me. but it does say that any none payment will incur 4% above HSBC annual interest rate. My question is what is the best way to approach this? do I just keep putting the insurance docs through their door each year (maybe recorded delivery as evidence they have had them) and update what is owed?

I know when either of the houses are sold we have to complete a Freehold Management Enquiries form where it asks us to disclose any outstanding charges on the lease. Do I just let it build up and let them deal with the bill at that point, id rather they were amicable and just paid their contribution and I cant afford nor want to get a solicitor to try and sort it for us. Any advice or experience in a similar scenario would be welcome.  

MultiFuelBurner

How much is this 12.5% as sometimes it's just not worth the hassle.

Mathdrab

MultiFuelBurner said:

How much is this 12.5% as sometimes it's just not worth the hassle.

This is what I'm beginning to think and just stick letters through the door every year (recorded delivery) and let their solicitors sort it should they eventually sell their property. This year its £45, so over time it will add up with interest along with each years renewal they owe. 

Jonboy_1984

Silly question but are they the owners, or has the property gone onto the rental market with a non-resident landlord?


You would need to keep issuing the invoices and periodically chasing (e.g. a 3 or 6 monthly statement showing the outstanding invoices and interest accrued with a request for payment) to prevent it becoming statue-barred after 6 years. 

You only need a free proof of postage rather than paying extra for a recorded delivery they may not sign for to prove effective service.

Mathdrab

Jonboy_1984 said:

Silly question but are they the owners, or has the property gone onto the rental market with a non-resident landlord?


You would need to keep issuing the invoices and periodically chasing (e.g. a 3 or 6 monthly statement showing the outstanding invoices and interest accrued with a request for payment) to prevent it becoming statue-barred after 6 years. 

You only need a free proof of postage rather than paying extra for a recorded delivery they may not sign for to prove effective service.

Thanks for this advice, its really helpful. They are the owners of the property. The other home that leases a garage are brilliant, so in some ways its the principle that we both pay our share and they don't that annoys me. I will make sure I get proof of postage and send statements every 6 months. 

chanz4

Send the invoice to their mortgage lender

Herzlos

You can always point out that if they don't pay as agreed in the lease, they'd be breaking the contract and the lease could be terminated. It'd presumably be in their interests to just pay their share of insurance to keep the garage, and if they don't want it you can presumably end the lease and regain possession of the garage.

eddddy

Mathdrab said:

... a new family moved into one of the houses 12 months ago and are refusing to pay their contribution. 

Do you know why they are refusing to pay?

Specifically, could it be because they think your demands for payment are invalid? (e.g. You haven't followed the 'rules' specified in the lease.)


In general, if a leaseholder doesn't pay - it's a breach of lease, and most leases say that you can take enforcement action, and charge your costs to the leaseholder.

For example, you could probably hire a solicitor, and add the solicitor's fee to the leaseholder's bill. And you might even be allowed to forfeit the lease (i.e. repossess the garage) and then sell it, to cover your costs.


But that assumes that your demands for payment are valid. If they are not valid, you wouldn't be able to claim any of your costs back from the leaseholder.

NameUnavailable

As said, make sure you have demanded payment correctly.

You could take action to forfeit the lease and then you'd have another garage space! Or file a moneyclaim online (small claims court) action for recovery of your debt.

As the freeholder of their garage you also have the option to cause problems for them should they wish to sell their house at some point, but I'd rather nip this in the bud and get them to accept their responsibility.

silvercar

chanz4 said:

Send the invoice to their mortgage lender

This is a good idea. The lender will hopefully then either nudge them to pay or pay it on their behalf. You can find their mortgage lender by downloading the deeds from land registry for £3. 

You could drop them a note, giving 14 days to pay otherwise you will notify the lender.

Jonboy_1984

Not sure about garage leases, but for flats/houses there is a legal minimum debt of £350 in the last demand for forfeiture of a lease, so that may not be a viable option in this circumstance.