BTL Flat: Solicitors have screwed us over - how can we get justice?

Intrepid_Wilson

Perhaps an overly emotive title but I'm looking for advice.

My wife and I saved up to buy a buy-to-let property in 2020 - we had tried in 2008 but the financial crash meant we lost everything. Neither of us have rented since the same sort of time, when we bought our first flat, which might explain our oversight...

Our solicitors - O'Neill Patient - were unresponsive and robotic throughout the purchase process. Once it was all done, we were glad to have nothing more to do with them.

However, I got an email in February 2023 from O'Neill Patient from another law firm called JB Leitch. The latter were making a demand on behalf of the residential management company, Wildheart, for a couple of thousand pounds in unpaid ground rent and service charges, which we had forgotten all about post-completion.

Wildheart had, apparently, been sending letters to the property but, we assume, the tenant had thrown them away or ignored them. O'Neill Patient had not thought it prudent to include our contact details on one of their forms so neither Wildheart nor JB Leitch had them. O'Neill Patient also did not immediately put our details on the Land Register after purchase, so this made contacting us even harder.

We know we have to pay the money and have made an offer about how to do this to the parties involved.

However, is it right for the amount of debt to be allowed to rack up like this? Surely it is the responsibility of either O'Neill Patient or Wildheart to inform us as soon as possible that they've not received their first payment, rather than two or three years later?

Not only that but Wildheart are increasing service charges by nearly 30% in 2024.

Any advice would be really appreciated here.

anselld

The Lease normally requires some sort of "Notice of Assignment" to be served on the Freeholder informing them of the new owner's details and mortgage arrangements if applicable.   You could check if this is required in the Lease and if so was it served correctly.

However, the bottom line is that it is your responsibility to ensure that the service charge, ground rent etc are paid and you are unlikely to get any success blaming your Solicitors.  In fact you should probably un-name them.

Hoenir

Attempting to blame anyone is a fruitless exercise ultimately will achieve nothing. Whatever the rights and wrongs. You should have been putting money aside into a reserve for ground rent and service charges. As was a known expense. 

 Risk and reward. BTL is a business venture.  Everyone will assume that you are both conversant with all aspects of being a LL. Maintaining an entire property comes at considerable cost. 30% is a large increase. However this needs to put into perspective of what expenditure this is covering. 

If you are struggling emotionally. Have you considered if BTL is what you expected to be. There's no disgrace in giving something a go then subsequently deciding it's not for you. 

eddddy

Intrepid_Wilson said:

However, I got an email in February 2023 from O'Neill Patient from another law firm called JB Leitch. The latter were making a demand on behalf of the residential management company, Wildheart, for a couple of thousand pounds in unpaid ground rent and service charges, which we had forgotten all about post-completion.

Can you clarify... you say there were charges that "we had forgotten all about post-completion"?

Do you mean  they were charges incurred before completion that you intended to pay after completion, or charges that were incurred after completion?

Intrepid_Wilson said:

Wildheart had, apparently, been sending letters to the property but, we assume, the tenant had thrown them away or ignored them. 

If your solicitor didn't serve a "Notice of Assignment", or if the "Notice of Assignment" was rejected - the letters would still be addressed to the previous leaseholder, either at the property or to any other address the previous leaseholder had provided.

Assuming that the "Notice of Assignment" was served and accepted, letters should have been addressed to you and sent to the property, unless you advised the managing agent in writing to send them somewhere else.

Intrepid_Wilson said:

However, I got an email in February 2023 from O'Neill Patient from another law firm called JB Leitch.

TBH, it sounds like the managing agent has gone 'above and beyond' what they were required to do, in contacting the solicitor you used in 2020. They must have searched back through their records to find the name of your solicitor.

They could have started proceedings to forfeit your lease instead - i.e. repossessed your flat - potentially without you knowing as you weren't getting any letters.

Intrepid_Wilson said:

However, is it right for the amount of debt to be allowed to rack up like this? 

Are they charging you admin charges (i.e. late fees and solicitors fees)? Is that the part of the bill you are unhappy about?

In general, the law allows management companies to make those kinds of charges - as long as they are reasonable. If you want to challenge the charges, you would have to show that the management company has acted unreasonably and/or the amount of the fees are unreasonable.




Edit to add...

Intrepid_Wilson said:

Not only that but Wildheart are increasing service charges by nearly 30% in 2024.

If you want to challenge the admin charges at tribunal, you need to construct a coherent argument. So It's best not to throw in unrelated stuff like the 30% increase in service charge.

However, you can challenge the 30% increase separately if you want, with a separate argument.

But it's probably best not to tangle both issues together. 

Jonboy_1984

The other minor point is there were major delays racked up at Land registry during the pandemic, to the point even now updates are taking 12 months to file.

Grumpy_chap

This doesn't look like an error by your Solicitors.
It seems as though the property transfer was correctly processed.

Did you seek "consent to let" from the Freeholder and notify them of your contact details for serving notices?  That is your responsibility and no-one else's.

Intrepid_Wilson

anselld said:

The Lease normally requires some sort of "Notice of Assignment" to be served on the Freeholder informing them of the new owner's details and mortgage arrangements if applicable.   You could check if this is required in the Lease and if so was it served correctly.

However, the bottom line is that it is your responsibility to ensure that the service charge, ground rent etc are paid and you are unlikely to get any success blaming your Solicitors.  In fact you should probably un-name them.

I will see if the Notice of Assignment was served. I don't believe it was as otherwise, I'd assume, the management company would have contacted us directly.

Intrepid_Wilson

eddddy said:

Intrepid_Wilson said:

However, I got an email in February 2023 from O'Neill Patient from another law firm called JB Leitch. The latter were making a demand on behalf of the residential management company, Wildheart, for a couple of thousand pounds in unpaid ground rent and service charges, which we had forgotten all about post-completion.

1. Can you clarify... you say there were charges that "we had forgotten all about post-completion"?

Do you mean  they were charges incurred before completion that you intended to pay after completion, or charges that were incurred after completion?

Intrepid_Wilson said:

Wildheart had, apparently, been sending letters to the property but, we assume, the tenant had thrown them away or ignored them. 

2. If your solicitor didn't serve a "Notice of Assignment", or if the "Notice of Assignment" was rejected - the letters would still be addressed to the previous leaseholder, either at the property or to any other address the previous leaseholder had provided.

Assuming that the "Notice of Assignment" was served and accepted, letters should have been addressed to you and sent to the property, unless you advised the managing agent in writing to send them somewhere else.

Intrepid_Wilson said:

However, I got an email in February 2023 from O'Neill Patient from another law firm called JB Leitch.

3. TBH, it sounds like the managing agent has gone 'above and beyond' what they were required to do, in contacting the solicitor you used in 2020. They must have searched back through their records to find the name of your solicitor.

They could have started proceedings to forfeit your lease instead - i.e. repossessed your flat - potentially without you knowing as you weren't getting any letters.

Intrepid_Wilson said:

However, is it right for the amount of debt to be allowed to rack up like this? 

4. Are they charging you admin charges (i.e. late fees and solicitors fees)? Is that the part of the bill you are unhappy about?

In general, the law allows management companies to make those kinds of charges - as long as they are reasonable. If you want to challenge the charges, you would have to show that the management company has acted unreasonably and/or the amount of the fees are unreasonable.

Edit to add...

Intrepid_Wilson said:

Not only that but Wildheart are increasing service charges by nearly 30% in 2024.

5. If you want to challenge the admin charges at tribunal, you need to construct a coherent argument. So It's best not to throw in unrelated stuff like the 30% increase in service charge.

However, you can challenge the 30% increase separately if you want, with a separate argument.

But it's probably best not to tangle both issues together. 

Thanks!

1. Yes, we forgot all about the service charge and ground rent as we a) haven't been tenants ourselves for years, b) didn't receive any information about them after completion, and c) had other stuff going on that took precedence. Once we were alerted, we've always expressed the intention to pay off these debts in good faith and in good time.

2. I will look into this further.

3. If our solicitor had not communicated anything to the freeholder / management agents, what could we have done as we would have not been aware of it at all? I'm far from deluded into thinking BTL landlords deserve any sympathy, but any leaseholder seems to be powerless in this situation had they tried to sue / repossess. 

4. Wildheart chose to involve solicitors JB Leitch, not us. Therefore, I'm not prepared to pay any legal fees that have been incurred if the correct information was not passed on due to incompetence.

5. We are discussing this with Wildheart and they have explained why there is an increase - replacement fire doors - but have been less forthcoming about by how much the service charge will go down the following year once the cost of those doors has been covered. We're still yet to see a schedule of costs from 2021, 2022, or for 2023.

Intrepid_Wilson

Hoenir said:

Attempting to blame anyone is a fruitless exercise ultimately will achieve nothing. Whatever the rights and wrongs. You should have been putting money aside into a reserve for ground rent and service charges. As was a known expense. 

 Risk and reward. BTL is a business venture.  Everyone will assume that you are both conversant with all aspects of being a LL. Maintaining an entire property comes at considerable cost. 30% is a large increase. However this needs to put into perspective of what expenditure this is covering. 

If you are struggling emotionally. Have you considered if BTL is what you expected to be. There's no disgrace in giving something a go then subsequently deciding it's not for you. 

Maybe so but I cannot sit by and just twiddle my thumbs. We made an error, admitted to it as soon as we were made aware, and proposed how to pay down what we owe. I feel like the involvement of the solicitors - on both sides - has only made things worse.

It's a 1-bed flat so the expense should not be massive. They are providing us with the breakdown of the expenditure but, to put it into perspective, my mother-in-law's 3-bed flat in London has a £1000 pa service charge and Wildheart are charging £1800 pa. That's criminal.

I don't know if I'm struggling emotionally or not - probably I am because this has just arrived whilst I'm trying to deal with being missold solar panels and having to pay off a miscalculated energy bill, to say nothing of the 29% interest on my Nationwide overdraft! I moved countries and changed jobs to be able to pay off my debts and improve my quality of life but it seems like things are only getting worse. But we're going to stick it out and find a solution.

Hoenir

Intrepid_Wilson said:

It's a 1-bed flat so the expense should not be massive. They are providing us with the breakdown of the expenditure but, to put it into perspective, my mother-in-law's 3-bed flat in London has a £1000 pa service charge and Wildheart are charging £1800 pa. That's criminal.

Until you receive the accounts for maintaining the property and can make meaningful comparisons. That's just pure assumption. 

In selecting a flat to buy and let. Service charges and ground rent should have figured as part of the process. As these could have a material impact on the overall financial return you make. 

Jonboy_1984

Service charges are never fixed and can vary year to year due to one off repairs, the type of building or other unexpected cost pressures (e.g energy costs, vandalism or in our old block the cleaners went bust partway through the service charge year, and the replacement company was vat registered).