Ground rent limitation

Jkrealm

I am struggling to find a definitive answer so hoping somone can help.

I have had a leasehold flat since 2017 every year the freeholder has sent the correct demand for ground rent and service charge as it is combined.

Due to multiple disputes and very poor administration from them I haven't paid.

They have now changed their admin team and have resolved issues and are demanding payment... Fair enough.

Now am I right they can only recover the last 6 years of charges as per the limitations act.

Or as they have sent the correct demands they can recover it all.

I am aware of the dangers of not paying ground rent and have covered the last 6 years in full now, but they state they will take legal action over the rest of the debt.

Any help would be greatly appreciated.

Woodstok2000

It becomes statute barred after 6 years from the date of last payment or acknowledgement of the debt. The time is 5 years in Scotland.

Jkrealm

So would an email discussing the issue deem acknowledgement?

eddddy

Woodstok2000 said:

It becomes statute barred after 6 years from the date of last payment or acknowledgement of the debt. The time is 5 years in Scotland.

That's not correct in this case.

A lease is generally executed as a deed. So it's a "specialty" for the purposes of the Limitation Act 1980.

So Service Charge debts can be enforced for up to 12 years:

See: https://www.legislation.gov.uk/ukpga/1980/58/part/I/crossheading/general-rule-for-actions-on-a-specialty/enacted

But ground rent debts can only be enforced for 6 years.

But things can still get messy. I've heard cases of people trying to sell their flats, but freeholders saying "We won't recognise the assignment (i.e. the sale) unless all the very old service charges and ground rent is paid".

Maybe if the leaseholder took the freeholder to tribunal, the tribunal would side with the leaseholder. But who wants to wait 6 months for a tribunal hearing, when they're trying to exchange contracts on the sale of their flat?

So maybe the leaseholder just pays up anyway.

Jkrealm

See I thought service charge was charged as rent as I pay one DD per month to cover both.

I thought a deed had to be witnessed and sealed.

I take your point about the sale though.

It does get confusing to the layman.

eddddy

Jkrealm  said:

I thought a deed had to be witnessed and sealed.

When a lease is signed, it is signed as a deed - with witnesses. No physical seal is needed.

In simple terms, a lease says "The leaseholder promises to pay the service charges" - and the leaseholder signs a deed (with witnesses) agreeing to that.

Jkrealm  said:

See I thought service charge was charged as rent as I pay one DD per month to cover both.

Using one DD to pay both doesn't really make any difference.