Threatened Lease Forfeiture Over Ground Rent – Advice Needed

peanutbutter24

Hi all,

I am looking for advice regarding a leasehold dispute that’s escalated unnecessarily.

I own and live in a leasehold flat that I purchased in 2021. When I purchased the property, ground rent was charged by the management company. In late 2023 the management company changed with little warning (1 month notice). The new management company was pretty rubbish and took almost a year to send us budgets and payment details – refusing to take management payments during their lengthy setup process.

Apparently around the same time the freehold was sold to a Guernsey-based company. I was never notified of any change in freeholder or that payments should be redirected. I have now checked back and can see ground rent was omitted by the new management company without any notice of the change.

Last week and out of the blue, I received a Section 146 Notice from a solicitor, acting for the new freeholder, demanding £2,300 within 14 days and threatening forfeiture of my lease. This includes ground rent (2 years at £350 per year), admin fees and legal costs (totalling £1,600). I’ve since asked for Proof of delivery of any prior demands but the solicitor simply sent me PDF letters which were emailed to me (which likely went into my spam folder which receives 20+ junk emails every day)

They’ve advised that a Section 3 Notice was allegedly posted to my flat - but not by recorded delivery. I’ve offered to pay the ground rent immediately, but they insist all fees are payable and cite lease clauses to ‘justify reasonable legal costs’ – which I have contested as they do not seem at all reasonable. I was given no prior notice or opportunity to resolve the matter before legal action was threatened. It feels like a the entire situation was manufactured to attempt to extract fees or forfeiture of my home.

Has anyone dealt with similar tactics from freeholder or solicitor? Is it worth challenging this in court? I’m prepared to fight it if necessary but would appreciate any insight or experience others can share. Thank you in advance.

eddddy

Unless you are 100% sure that you would win this case at a tribunal, the usual advice is to pay whatever is being demanded (i.e. £2300) and say that you are paying under protest and intend to challenge it at tribunal - unless they agree to waive/reduce the charges.

(The threat of  a tribunal case might or might not make the management co reconsider their £1600 fees.)

Then challenge it at tribunal - and hopefully get some/all of the charges refunded.




The benefit of paying the full £2300 (£700 GR + £1600 fees) now and then going to tribunal is:

• if you win, you'll get some/all of the £1600 fees back
• if you lose, you'll only have paid £1600 in fees

If you don't pay the full £2300 now - further legal fees will probably be added - let's say another £1000, then:

• if you win, you won't have to pay some/all of the fees
• if you lose, you'll have to pay £2600 in fees
  

So if you don't pay now, you risk paying greater fees if you lose at tribunal.


(But either way, you should at least pay the £700 ground rent - because, based on what you say, you don't appear to have any case for not paying that.)

peanutbutter24

eddddy said:

Unless you are 100% sure that you would win this case at a tribunal, the usual advice is to pay whatever is being demanded (i.e. £2300) and say that you are paying under protest and intend to challenge it at tribunal - unless they agree to waive/reduce the charges.

(The threat of  a tribunal case might or might not make the management co reconsider their £1600 fees.)

Then challenge it at tribunal - and hopefully get some/all of the charges refunded.




The benefit of paying the full £2300 (£700 GR + £1600 fees) now and then going to tribunal is:

• if you win, you'll get some/all of the £1600 fees back
• if you lose, you'll only have paid £1600 in fees

If you don't pay the full £2300 now - further legal fees will probably be added - let's say another £1000, then:

• if you win, you won't have to pay some/all of the fees
• if you lose, you'll have to pay £2600 in fees
  

So if you don't pay now, you risk paying greater fees if you lose at tribunal.


(But either way, you should at least pay the £700 ground rent - because, based on what you say, you don't appear to have any case for not paying that.)

Thank you for the advice. I have tried paying the £700 already - I have offered multiple times to the solicitor but my offers were ignored. Unfortunately I do not have another £1,600 to pay the extortionate legal fees at this time. I am literally at the end of my wits - how is this setup even legal?

eddddy

peanutbutter24 said:

Thank you for the advice. I have tried paying the £700 already - I have offered multiple times to the solicitor but my offers were ignored. 

Do you have a copy of the original ground rent bill? It will almost certainly show payment instructions (e.g. the sort code, bank account, and payment reference you need to use.)

If you don't have a copy, you could ask for one.

peanutbutter24 said:

Unfortunately I do not have another £1,600 to pay the extortionate legal fees at this time. I am literally at the end of my wits - how is this setup even legal?

It's (probably) legal, if they sent you a Section 3 notice, then ground rent bills, followed by reminder/warning letters.

It's (probably) not legal, if they didn't send you a section 3 notice and/or ground rent bills.

It's not legal, if the fees are unreasonably high for the work that the management company and/or solicitor actually did (i.e. they cannot include a penalty fee or equivalent)


So it's a case of gathering the facts:

• Why were ground rent bills sent to you by email? Did you ever request bills by email in writing? And/or did you ever request that the bills be sent somewhere else?

• Did others in the block receive a section 3 notice and ground rent bills?

• Do you live in the flat? If not, could the occupants of the flat discarded letters addressed to you?

You can try arguing the above facts with the management co - but they might simply dispute them, and keep adding more fees, until you pay.


If the management co are difficult, perhaps the only way to shut this down is with a tribunal hearing.
See: https://www.lease-advice.org/advice-guide/application-first-tier-tribunal-property-chamber/

peanutbutter24

eddddy said:

peanutbutter24 said:

Thank you for the advice. I have tried paying the £700 already - I have offered multiple times to the solicitor but my offers were ignored. 

Do you have a copy of the original ground rent bill? It will almost certainly show payment instructions (e.g. the sort code, bank account, and payment reference you need to use.)

If you don't have a copy, you could ask for one.

peanutbutter24 said:

Unfortunately I do not have another £1,600 to pay the extortionate legal fees at this time. I am literally at the end of my wits - how is this setup even legal?

It's (probably) legal, if they sent you a Section 3 notice, then ground rent bills, followed by reminder/warning letters.

It's (probably) not legal, if they didn't send you a section 3 notice and/or ground rent bills.

It's not legal, if the fees are unreasonably high for the work that the management company and/or solicitor actually did (i.e. they cannot include a penalty fee or equivalent)


So it's a case of gathering the facts:

• Why were ground rent bills sent to you by email? Did you ever request bills by email in writing? And/or did you ever request that the bills be sent somewhere else?

• Did others in the block receive a section 3 notice and ground rent bills?

• Do you live in the flat? If not, could the occupants of the flat discarded letters addressed to you?

You can try arguing the above facts with the management co - but they might simply dispute them, and keep adding more fees, until you pay.

I have been sent a copy of the original ground rent bill by the solicitor. There are no payment details, only a request to login to an online portal. I have tried logging in however the account says it is blocked. I have also tried calling who also refused to take payment for the ground rent. 

eddddy

Just to double check - are you definitely giving the whole story? You are offering to pay your ground rent, and the management company are refusing to provide instructions for payment? What do they actually say when you phone?

Based on what you say, I would write/email to the management co saying something like:

"I have been attempting to pay my ground rent following the instructions on the ground rent demand. However, the portal says my account is blocked.

I have also phoned you to ask for alternative payment options, and you haven't provided any.

Therefore, you are preventing me from paying my ground rent.

I am planning to challenge your fees at a tribunal. At the same time, I plan to inform the tribunal that you are refusing to accept my ground rent payments."

peanutbutter24

eddddy said:

Just to double check - are you definitely giving the whole story? You are offering to pay your ground rent, and the management company are refusing to provide instructions for payment? What do they actually say when you phone?

Based on what you say, I would write/email to the management co saying something like:

"I have been attempting to pay my ground rent following the instructions on the ground rent demand. However, the portal says my account is blocked.

I have also phoned you to ask for alternative payment options, and you haven't provided any.

Therefore, you are preventing me from paying my ground rent.

I am planning to challenge your fees at a tribunal. At the same time, I plan to inform the tribunal that you are refusing to accept my ground rent payments."

That is correct, but only since I found out about all of this last week. The solicitor is JB Leitch (who after posting here I realised have quite the track record for this kind of thing). I have tried reasoning with the management company who have outright rejected any offer to pay the ground rent. I asked them to confirm by email "your account is currently in breach due to non-payment of the ground rent. As a result, we are unable to accept any payments directly or action any requests at this time."

Emmia

peanutbutter24 said:

Hi all,

I am looking for advice regarding a leasehold dispute that’s escalated unnecessarily.

I own and live in a leasehold flat that I purchased in 2021. When I purchased the property, ground rent was charged by the management company. In late 2023 the management company changed with little warning (1 month notice). The new management company was pretty rubbish and took almost a year to send us budgets and payment details – refusing to take management payments during their lengthy setup process.

Apparently around the same time the freehold was sold to a Guernsey-based company. I was never notified of any change in freeholder or that payments should be redirected. I have now checked back and can see ground rent was omitted by the new management company without any notice of the change.

Last week and out of the blue, I received a Section 146 Notice from a solicitor, acting for the new freeholder, demanding £2,300 within 14 days and threatening forfeiture of my lease. This includes ground rent (2 years at £350 per year), admin fees and legal costs (totalling £1,600). I’ve since asked for Proof of delivery of any prior demands but the solicitor simply sent me PDF letters which were emailed to me (which likely went into my spam folder which receives 20+ junk emails every day)

They’ve advised that a Section 3 Notice was allegedly posted to my flat - but not by recorded delivery. I’ve offered to pay the ground rent immediately, but they insist all fees are payable and cite lease clauses to ‘justify reasonable legal costs’ – which I have contested as they do not seem at all reasonable. I was given no prior notice or opportunity to resolve the matter before legal action was threatened. It feels like a the entire situation was manufactured to attempt to extract fees or forfeiture of my home.

Has anyone dealt with similar tactics from freeholder or solicitor? Is it worth challenging this in court? I’m prepared to fight it if necessary but would appreciate any insight or experience others can share. Thank you in advance.

This situation is one of the big downsides of leasehold, and shows why you should check your junk email folder regularly.

The advice to pay the whole amount, and then challenge is good - can you really not raise the extra £1600 to do this?