Leaseholder not paying landlord's reasonabe legal fee for lease extention Section 42

HiroA

I'm  a joint landlord of a residentail house with 3 flats.  the freehold is shared between me and Studio Flat. Ground floor flat recently served Section 42 notice to extend the lease but their notice was deemed withdrawn as we did not reach an agreement.

During the negotiation they suddently changed story, forcefully tried to turn it into informal negotiation and started insisting that we pay our legal fee & surveyor's fee and offered a very poor deal, including freehold buy in and 990 year lease etc.  Just before the deadline we gave them 2 weeks notice to accept our offer in accordance with their notice but they threatened that if we don't accept their offer they will go ahead with their offer.  I told then they could not do it and that we would not accept their nformal negotiation. They then threatened us imcomprehensively with a "formal notice" (whatever that means) to claim their deposit back, which is totally mad.

It did not seem to be possible to have coherent communication with them and I felt harassed and thereatned, and almost thought of reporting it to the police.

Our solicitor sent the invoice to their solicitor but after a month we received no response.

What would be the best approach?  What could we do next?  

GDB2222

Small claim using MCOL.

The problem is, though, that you have to live with these people. How much are you owed, and is it worth pursuing? 

Bear in mind that you will have to act as a litigant in person, as the amount involved will not justify instructing a solicitor. 

HiroA

GDB2222 said:

Small claim using MCOL.

The problem is, though, that you have to live with these people. How much are you owed, and is it worth pursuing? 

Bear in mind that you will have to act as a litigant in person, as the amount involved will not justify instructing a solicitor. 

Thank you for your respone. I have since then pushed them and they say they are going to dispute,go to FTT. They owe us nearly £3,000, so we will be representing ourselves if we make a small claim (their claims are totally invalid though so sure we will win). The thing is that even if the judgement was made against them, they may still not pay.   Apart from that we still have to pay some fee to our solicitor as we had to consult him a bit when they changed stories and started making strange requests.  Am I right to understand that if they want to dispute, they are expecte to pay first then dispute?  

eddddy

Presumably you have a specialist lease extension solicitor, so you should ask them how to proceed. I'd be pretty sure that you can add your solicitor's fee to the amount the leaseholder owes you.


FWIW, if the leaseholder owed service charges or ground rent, typically the freeholder would instruct a solicitor who would start the process of forfeiting the lease (i.e. repossessing the flat).

The solicitor's fee (and other legal costs) would be added to the leaseholder's debt.

But I'm not sure if lease extension costs can be enforced in the same way (i.e. by forfeiting the lease).



FWIW, if you tried to persue this via MCOL, I suspect the judge would say it's too specialist to be dealt with by the court, and it would be transferred to the FTT. 

HiroA

Thank you all for the useful responses, I’ve just received the full payment.

It seemed that going to the Tribunal or county court would be the normal procedure, but as more than 30 days have passed the solicitor had sent us the invoice for us to pay, and I did not want the interests to be applied and was not sure if the leaseholder would pay anything even if we won the case, having considered their behaviours so far.

So I demanded that they pay immediately and dispute later if they wish, and that if they don’t pay we will go to the court.  I also hinted that we will also ask their mortgage provider to pay on their behalf and add it to their mortgage, and will contact their employer (which seemed to have done the job. It was easy to identify them online as during the premium negotiation he boasted about his job saying he knew better.)

I was shaking after I sent the email, but then they immediately replied and said will pay – and paid.  We still have our own legal fees to pay, we probably won’t be able to use a solicitor if they submitted a notice under the new legislation, but I am just relieved.

Thanks once again for your responses.

eddddy

HiroA said:

We still have our own legal fees to pay...

It sounds like a good result.

But what was the original £3,000 for, if it didn't include your legal fees?

HiroA

eddddy said:

HiroA said:

We still have our own legal fees to pay...

It sounds like a good result.

But what was the original £3,000 for, if it didn't include your legal fees?

Thanks, £3,000 included the reasonable legal fee and our surveyor's fee which we could ask the leaseholder to pay, but our solicitor explained in the beginning that there would be an hour or so he would be spending on the case which we wouldn't be able to charge to the leaseholder.

On this occasion he spent several hours as I did have questions as the leaseholder changed their minds, and also their solicitor did not respond to our solicitor's enquiries which made the the process a bit complicated.