Ground rent - County Court Judgement

jackvaughn · 10 May 2018 at 1:05AM

I hope this thread is ok in this forum. I was unable to find anywhere else that seemed suitable.

Earlier this year I was a little late in paying my ground rent for the year. I eventually paid it when I received the "final demand", just before going on holiday.

Upon my return I received a letter for another company called WL Leasehold Services. The letter acknowledged that the ground rent of £360 had been received, but I was now being charged a further £6.39 interest for late payment, plus £75 for a Freeholder's case preparation fee and £290 for the case fee.

Speaking to the company by 'phone it became clear that they would not see reason, and were happy to charge me a fee for a case which had been settled before they wrote to me. I did however make a payment of £6.39 to cover the interest incurred.

A month later, a second letter arrived but now the case fee had risen to £390.

They quoted a clause on my contract stating...
"To pay all reasonable and proper costs, charges and expenses (including legal costs and fees payable to a surveyor) incurred by the Lessor in or in contemplation of any proceedings or service of any notice under Section 146"

I have now received a letter from The County Court Business Centre for a claim for £537.00 plus £60 court fee.

My intention is to defend this claim, based on the fact that I had paid the original amount before a letter was sent out, and so a case fee of £537 was in no way "reasonable".

I'll be writing my defence response in the next couple of days and would appreciate it if anyone has any thoughts or suggestions of anything I should add to strengthen my defence.

Thanks in advance,

Jack

silvercar · 10 May 2018 at 8:16AM

How late is "a little late"?

Have they actually taken you to court, or just stated that this is their intention?

IANAL but I wonder if marking the next payment to them as being in full and final settlement will help.

agrinnall · 10 May 2018 at 8:16AM

The first question the court will have to consider is whether the original £290 case fee was reasonable; the increases since then have been due to the extra work required following your refusal to pay. If they decide that £290 is reasonable then they may well accept that the additional costs are reasonable too. I don't think you have a strong defence, especially as you admit you were late paying in the first place. It might be worth seeking proper legal advice on whether you have a good chance of winning.

jackvaughn · 11 May 2018 at 5:12AM

Thanks for the replies.

Silvercar, I paid the ground rent due 3 days after receiving the final demand, by bank transfer. This money was received before the letter from the debt recovery agent was sent, and is acknowledged in the letter sent by said agent.

Agrinnall, my argument would be that it is not reasonable to charge a fee to recover a debt which has already been paid. It could be argued that the interest which was asked for was still owed, but a fee of £290 to recover £6.09 is excessive.

What are your thoughts please?

eddddy · 11 May 2018 at 6:00AM

In these circumstances, LEASE (the Government funded body that advise leaseholders) suggest that you should pay the fees under protest and then challenge the fee at a Tribunal.

That way, you just have to pay a tribunal fee (£100) and avoid the risk of escalating interest, legal fees, debt collection fees, and a court deciding that you must pay those costs.

But make sure that you make it clear that you are paying under protest.

If the tribunal finds in your favour, your freeholder has to pay you back the £100 tribunal fee.

Here's LEASE's flow chart that confirms this: https://www.lease-advice.org/files/2016/09/service-charge-dispute-resolution-flowchart2.pdf

You can also contact LEASE for free advice: https://clients.lease-advice.org/appointments.aspx

InterestedParty2018 · 11 May 2018 at 12:11PM

Back in the day, ground rent was due whether demanded or not!

In your case, did you receive the original demand for ground rent? Was there a polite reminder between the original and the final demand?
You say you paid 3 days after the final demand - but how long after the actual due date?

It is my opinion that you paid late, the freeholder has engaged an agency to begin proceedings to recover the arrears. The minute this happens, costs are incurred.

Look at this example:

If you had a contract with someone, and that someone owed you money, they never paid, you engaged solicitors to help recovery, but within a few days/week of giving the solicitors the instruction, you receive payment. The solicitors will STILL charge for their "costs to date", usually on a time basis, but could be a fixed fee. If your contract allows you to recover those solicitors cost, you will pursue it.

This scenario is no different.

If the lease allows for legal fees to incurred to deal with a breach of the lease (in anticipation of ultimate forfeiture), then the freeholder is entitled to progress down this route. Costs have to be reasonable too.

Of course, how reasonable is "reasonable"?

It is my (limited) experience that judges do not like solicitors incurring costs (bringing a matter to court), to recover fees alone , when related to an arrears breach. Equally, it is not unreasonable to "charge" you for additional time, effort & work involved with dealing with the recovery of your debt....

If it does get to court, there will be arguments for both sides.

Have you asked for a meeting with them to discuss? Maybe agree settlement?

If you can meet and reach settlement, it would be great.
Even if you cant reach a settlement, arranging a meeting to attempt to reach a settlement will be looked upon favourably by a judge.

Good luck.

jackvaughn · 29 September 2018 at 3:52PM

Update:
Approximately one month before I was to go to County Court, the claimant has backed down!

Just goes to show that if you stand up to this type of bullying debt recovery company, they will leave you alone.

silvercar · 29 September 2018 at 5:30PM

Great news.

Thanks for reporting back, it is good to hear the final result.

AnotherJoe · 29 September 2018 at 7:04PM

jackvaughn wrote: »

Update:
Approximately one month before I was to go to County Court, the claimant has backed down!

Just goes to show that if you stand up to this type of bullying debt recovery company, they will leave you alone.

Thanks for posting back can you outline what you did in terms of letters you wrote and what you said in them, etc?

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Ground rent - County Court Judgement

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