I missed a Ground Rent payment

Sept1975

Hello, I am looking for some advice. I missed an invoice for £60 ground rent. I became aware of this 8 weeks later when I received an email demanding I pay £977 in 6hrs. I was on holiday at the time. "Please be aware should payment not be forthcoming by close of business (6 pm UK), the link will deactivate and the landlord will begin forfeiture proceedings to repossess your property.

For the avoidance of doubt, the above is non-negotiable and XXXX will not enter into any further correspondence on this matter". I tried to call them this morning to understand how they apply the charges. I cannot get a straight answer. Do I pay and then dispute through a legal method? Have been doing some online research but not entirely sure. I have located the landlord in Companies House - looks like it's a 1 man band and that is actually the person I was speaking to although he gave a different surname! Any info greatly received, and thank you for taking the time to read this.

saker75

Unless there’s history you aren’t telling us, this sounds like rubbish. A quick call to Shelter or CAB should help.

Olinda99

just be careful that are some circumstances where if you don't pay the ground rent your lease can be forfeit 

I believe leasehold reform act addressed this somehow but I am not up to date on it

 you should get some advice quickly

Sept1975

Thanks, have put a call into Citizen Advice.. I have now received this from them (him!) 

Because payments were not made in accordance with the contract between you, the tenants you represent, not only is this deemed a breach of the terms of the lease, but our client has incurred additional administrative costs as a direct result.

Our client has the right to seek to remedy the breach, instruct a third party to act on their behalf and to recover the associated additional costs in doing so. By virtue of ownership, and under the terms and conditions of the lease, it is your responsibility to ensure that payment for your ground rent is made on time.

Under the terms of the lease, our client is not obligated to chase you for debt, as advised above, it is your responsibility to ensure payment is made on time and chase up your demands if they were not received.

 

In addition, our client is entitled to pursue forfeiture of the lease due to non-payment of the rental sums pursuant to the terms of the lease. The ground rent in excess of the necessary criteria threshold has accrued in accordance with Section 167 of the Commonhold and Leasehold Reform Act 2002 and The Rights and Re-entry and Forfeiture (Prescribed Sum and Period) (England) Regulations 2004 No.3086). Our client is not required to obtain a declaration/county court judgment or an admission for such arrears prior to pursuing forfeiture of the lease.

 

Legal costs have been incurred as a result of non-payment and payment of the same is sought pursuant to the Fourth Schedule, Part I, paragraph 2 of the leases and Schedule 11 of the Commonhold and Leasehold Reform Act 2002.

A breakdown of the balance has been provided for you below:

 

1.     Half Yearly Ground Rent - £60.00

2.     Arrears Charge - £125.00

3.     Arrears Legal Review - £200.00

4.     Solicitor Instruction - £300.00

5.     Possession Notice - £312.00

the_lunatic_is_in_my_head

Better off on the housing board, have requested the thread be moved OP.

I have a feeling you are better off paying but the housing board experts should know more

Brie

I might start by paying the £60 ground rent to catch that up so your good intentions are obvious.  But I am neither a tenant or landperson.

As for the additional charges they seem wildly disproportionate to the original amount owed.  

HillStreetBlues

I agree pay the £60 first as that's not in dispute.

A_Geordie

Not a property expert but have a little knowledge through my own experience, and I agree with others to pay the £60 ground rent immediately, unless you are confident that the LL has not served a valid ground rent notice using the prescribed method.

My first thought is that I am not entirely sure that the LL can pursue a forfeiture claim at all. Section 167(1) of Commonhold and Leasehold Reform Act 2002 referred to says that the right to exercise a right of entry or forfeiture can only apply if the prescribed sum does not exceed £500 (but currently the threshold is £350) or the sum outstanding has remained unpaid for more than 3 years.

However, s167(3) also says that when you calculate the "unpaid amount" you have to deduct any administration charge in connection with that unpaid amount. That leaves £60 ground rent which is way less than the £350 threshold for the LL to exercise a forfeiture right.

Regarding the admin charges, section 81 of the Housing Act 1996 says that a LL can't exercise a forfeiture right unless you have already admitted the charges. Otherwise, LL needs to go to the tribunal to obtain a determination of the charges that they are owed.

Some of those charges look suspicious or at least grossly inflated, but whether they are reasonable I don't know.  For starters, I've never known any law firm to charge a client for merely instructing them, you instruct them and then they charge their hourly rate or whatever rate that has been agreed along with expenses, disbursements etc. So the £300 instruction charge is already looking somewhat fishy. If this individual is in fact a solicitor then they may be in breach of the SRA Code of Conduct for charging that. Equally, if the individual is impersonating a solicitor then that's a criminal offence. And if that solicitor is misleading you as to the law to gain an unfair advantage, well that would also constitute a serious breach of the code of conduct.

Possession notice may be inflated given that most notices are standard and prescribed form so to charge £312 seems an awful lot for filling in some missing blanks, more like £50-£100 at best. I'd question the £125 arrears charge, is that a charge for simply being in arrears and is it set out in the lease? Maybe it's a duplicate of the legal review charge?

Long and short, you would do well to get some proper legal advice on the admin charges as you might be able to instigate proceedings with the Tribunal to challenge those charges if they are considered unreasonable. Otherwise pay up all of the fees and learn from the expensive error.