LEGAL FEES ADDED ALONGSIDE SERVICE CHARGE

Marvellousmrsmaisel

gm0 said:

  If this is a share of freehold and you are now one of the part owners of the company via its ltd company (member on register or share owner).  Then you have two relationships.  Two hats.

- Leaseholder (relationship to the freehold Ltd) - they do certain things for you of a common nature.  And you are obliged to pay a share for them (from the lease).  This can include the directors taking or defending legal action when it becomes relevant to chasing debts (of other leaseholders), disputing trade suppliers , neighbours etc.

- Freehold "shareholder" (as a part owner of said company) - relationship as owner to the company which is run by elected directors (volunteers unpaid usually) from among the owners.  Democratic collective ownership.  The company articles (for your Ltd, Companies House) describe how that is applied to decision making.  One lease = one share. One share = one vote.  Simple majority.  Is common.  But there are others.

- You don't have a direct legal relationship with other leaseholders.  If they break their leases and it affects you then you can press the freehold company to act (via agent if there is one, directors if there isn't).  This covers behaviour issues, unaddressed leaks, nuisances.  And the freehold company should be collecting service charge dues from all leaseholders anyway.  And chasing the delinquent.

Your fellow residents as directors - unpaid spare time volunteers - would (with rare exceptions) not self represent in legal matters.  But hire an agent (all year) or hire lawyers as needed -  and the bill is split across the shareholders of the share of freehold.  This is a bad thing to have happen due to cost.  Rates per hour / cycle of communication or action are steep.  But it needs to happen when leaseholder A has a problem (lease breach) which the freeholder needs to enforce on leaseholder B.  And they ignore/refuse.  Or leaseholder B is simply not paying their dues.

They should act.  But their sanctions and options are limited.  Letters are sent.  Solicitor letters are sent.  After long delays and much disappointment.  Court action to forfeit the lease begins.  Legal costs for court action are significant.  And the courts are reluctant to confiscate large assets like leases for small (and disputed) arrears.  The delinquent makes a part payment under protest.  And continues disputing the amounts and causing trouble and more tribunal action.  The court doesn't confiscate.  It goes on some more.  And they go back to court (queue up) eventually.  Costs build.  Legal cost award and apportionment becomes the dominant question.

Delinquent lease owners will - inevitably - immediately challenge as many as possible of the charges and use the lease laws to dispute the validity and basis of them at tribunal.  Repeatedly.  Bog it down. Delay Delay Delay.  It can go on for months and years.  And burn significant legal costs.  If the place is well run and records in good order - the tribunal process will be non-threatening. If more casual about tendering work and records - this can be problematic. 

The decision for the freehold company - guided by its owners collectively (and democratically to its articles) is whether the costs and win probability of any fight - are worth the amount under dispute.  This makes some people very angry that "they" are getting away with it.  But you also don't spend 60k to chase 10k.

Separately

You have previously been conveyanced into this property.   The question of whether the previous owner has deceived you depends on a number of things.  While in practice they likely probably did fail to mention something significantly offputting.  But what matters are timings and what you can prove.   Timing of the freehold purchase and setup of the company (could matter) relative to the timing of the declaration.  As does exactly what they wrote on the seller q&a forms or to specific questions.   The situation *could* be a false declaration where a losses claim could proceed.  When you know what your final losses are.  Or it could be just about valid - if unhelpful - an uncertain claim

This is a query with a lawyer with relevant experience willing to act.  Until you understand the nature of the dispute (or disputes) from the freeholder to the other leaseholder and what the court action is about.  And the exact timeline.  This will not be a conclusive conversation.  And so a waste of money.  It will cost low thousands to get a professional opinion on whether to take the claim forward. 

The documented and communicated in writing status of the dispute at the time of the seller declaration.  The exact text. 

A small split "share of freehold" house - has basically NO money other than the money you give it.   There is no "them" other than you - to pay for it.  Lessee charges under the lease.  Freeholder expenses (as collective owners).

The situation where debts are owed by a delinquent and the company cannot pursue them for lack of cash.  Is completely stuck.  A director or shareholder, or commercial loan is a way to cashflow manage past that out of the impasse.  At some point a freehold AGM shareholders meeting is necessary.  This may well (actually MUST) include inviting the leaseholder delinquent - if they have a share of freehold share.  For it to be valid.  Even though a significant amount of the discussion is on matters and decisions that relate to a dispute with them.   

To say this is awkward rather understates the problem.  They will look for any procedural irregularity to grind into their dispute and legal action and delaying tactics.  The directors have to avoid that trap.  And yet also hold the meeting in a way that other non-legally trained residents can understand and accept.

Thanks for your very in depth reply and for taking the time. I don’t think I have a share of the freehold but I do have a share certificate. The seller did know about the issues but didn’t disclose as I have a copy of 2 documents been given to me by a friendly neighbour who’s property is freehold and not the main building where the flats. One is from the directors of the management company and the other is the problem leaseholder informing the other leaseholders of what he intended to do and was trying to gather support. Both are over a year before I bought the property. It just seems there are lots of “grey areas” in leases. I’ve tried to make sense of the lease and if it was in simple English speak I might understand 😂. I’m trying to get help though of a better understanding and trying to establish if I have to pay it bearing in mind the circumstances. Plus more importantly I just don’t have the money. I don’t work due to numerous health conditions so have been living off savings since my divorce. I’m unfortunately going to have to apply for Universal Credit when my daughter leaves college in a few months as I will lose child maintenance then and child benefit. I could start a claim now as my savings have dropped low enough but I will wait until then. I certainly don’t have the kind of money they are asking for,nor should I have to pay it.