Bankrupt Freeholder Nightmare – Now they say we owe them money?

by Readers Question

11:07 AM, 12th August 2015
About 3 years ago

Bankrupt Freeholder Nightmare – Now they say we owe them money?

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Bankrupt Freeholder Nightmare – Now they say we owe them money?

I will try and explain this the best I can but it confuses the hell out of me so here goes. In 2009 I bought 2 leasehold flats, shortly after the builder/freeholder who is registered in Guernsey went bust owing money to the bank, the council and a solicitor who also ended up bust. nightmare

However the builder/Freeholder just before he went bust transferred the freehold into a sister company also registered in Guernsey. While all this was going on our Management company that was also owned by the original Builder and was registered as Dormant was not doing the maintenance etc…that we were paying for so we all formed a residents association and withheld service charge money on the grounds that they were not doing anything.

We then formed our own RTM and managed things ourselves. Now here comes the problem, none of us have been paying ground rent since 2009 because we have not been billed or if we were billed it was by the management company and it wasn’t done correctly plus we were not told about the transfer of the freehold (to his other company) so we assumed that it was being dealt with by the receivers because our original freeholder went bust.

Now our new freeholder (still the original one but different company) has got a solicitor on to us saying pay up or else, BUT we have had contact with our local council and have it on good authority that the transfer is being investigated by Crown Estates, because they think it was transferred illegally between the 2 companies just before the first company went bust, apparently this is legal practice in Guernsey but because the companies were operating in the UK then they should have operated according to UK law not Guernsey law.

So the question is should I pay this Freeholder the ground rent owed or not?? Plus as I understand it we were supposed to receive a S3, S3A or section 5 notices regarding the transfer of the freehold which we did not.

Any advice would be fantastic!!

Rob



Comments

Mike McDonagh

12:07 PM, 12th August 2015
About 3 years ago

Hi Rob,
Been through this but not with Guernsey extension.
The simple answer is yes you will have to pay the ground rent in accordance with the terms of the lease. The outstanding question is to whom you should pay it. We collected the money and ring fenced it in a separate account until entitlement was clarified and this was supported by the LVT (as was).
You will not have to pay the service charges unless the expenditure can be proven and justified. Typical examples of this might include the buildings insurance and communal services etc. but make sure you demand proof that they were all paid. In our case FH produced insurance certificate which turned out to have been cancelled as only one months premium was paid.
The biggest problem you may face is if any LH is trying to sell prior to resolution.
Good luck, Mike

Mark Weedon

14:35 PM, 12th August 2015
About 3 years ago

You don't say how many flats there are but if there are quite a few you may be best getting together and using the services of a solicitor with specialist knowledge in this area.
In any event i would write back an acknowledge you owe the ground rent to the freeholder. However, you need to establish the freeholder is the correct person.
I would also mention you may wish to refer the matter to the FFT.

Rob

14:50 PM, 12th August 2015
About 3 years ago

10 flats in all, who's the FFT?

Mark Weedon

15:11 PM, 12th August 2015
About 3 years ago

Sorry should be FTT. First Tier Tribunal which replaced LVT.

Chris Amis

22:04 PM, 12th August 2015
About 3 years ago

If the sale/purchase notices were not given, perhaps you can now force them to sell you the freehold, the time limits are from the point the notice is served.

http://www.lease-advice.org/publications/documents/document.asp?item=16#23

Good luck finding the leasehold police to apply the fine.

(ps You are safe on service charges, they have 18 months to bill them)


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