Flat owner in service charge arrears and breach of lease?

by Readers Question

17:06 PM, 14th May 2017
About A year ago

Flat owner in service charge arrears and breach of lease?

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Flat owner in service charge arrears and breach of lease?

This is an unusual one. I’m the MD of a Right To Manage company who look after the management, maintenance and service charges for a block of 10 flats of which I own one.

One of the landlords has now failed to pay the service charge for the last year now totalling arrears of £400. This has now got to the level where it starts to make sense to issue county court proceedings against her.

Another more serious and complicated matter, however, is that her tenant and his relatives/friends who visit his flat engage in anti-social behaviour – this includes but is not limited to smoking cannabis in the hallway, knocking on other residents doors asking for money (presumably to buy drugs), dumping furniture in the hallway and outside, making noise and being intimidating to the other residents. This behaviour is in breach of the lease therefore in theory the landlord should be culpable.

The issues I have so far are:
1) I’ve been unsuccessful in attempting to contact the landlord over the last few months either by E-Mail or phone. Writing by letter is now the last resort.
2) The other director of the RTM company contacted the freeholder’s representatives who indicated that whilst they agreed that the tenant’s behaviour constitutes a breach of the lease, it is the RTM company’s responsibility to instigate further action.

The service charge arrears I could probably deal with directly by way of a notice of intent to progress with county court proceedings. Dealing with her tenant’s behaviour is, however, another matter – I need to address it because it is upsetting the other residents and denigrating the appeal of the block where the other 9 residents are wonderful – clearly this could lead to decent tenants moving out.

I wondered if anyone has experience of a good legal company proficient in dealing with these sorts of cases. For convenience, I’d prefer to instruct such a firm to deal with both issues simultaneously however without paying an extortionate amount!

Kind regards
GP



Comments

Neil Patterson

17:08 PM, 14th May 2017
About A year ago

Hi GP,

Have the Council or the Police be called in before?

The best people in the industry that could help are Paul Shamplina and his team at Landlord Action and the Sheriffs Office.

See >> https://www.property118.com/evicting-tenants/

Chris Clare

14:44 PM, 15th May 2017
About A year ago

Hi GP

Have you looked into whether or not the owner has a mortgage?

If they do you could issue a simple breach of lease letter detailing where and why exactly the lease has been breached but also copy in the mortgage company.

I have done this personally and it gets amazing results as the lender is fully conversant with the effect of lease breaches ie they could completely lose possession of their security. My long winded dispute of 12 months was resolved in 2 weeks after employing the lender to my cause.

David Price

15:05 PM, 15th May 2017
About A year ago

If you take action in the County Court the tenant will likely ask for the case to be transferred to the First Tier Tribunal. You will then have a lengthy task of proving your case. The last time I went to the FTT the document bundle (four copies and no electronic media allowed) cost £100 just to bind. This is in addition to 2000 sheets to print and a summer to produce all the evidence. The leaseholder concerned did nothing. On second thought she did not do nothing, she moaned constantly. Eventually two barristers and £26,000 later the RTM company won the case with the help of a professional surveyor who deemed the work necessary. Unfortunately costs are not awarded and if the leaseholder asks for the management company to be denied the right to charge leaseholders the cost of the action, then it is trading insolvent and must immediately be wound up.

With antisocial behaviour you have to prove your case and this is very, very difficult. You know it is happening but how do you prove that to a judge? Its a rhetorical question to which I do not have the answer.

Isn't English justice wonderful.

Giles Peaker

21:07 PM, 15th May 2017
About A year ago

First, check the lease for a clause that the leaseholder will have to pay the costs 'in preparation of/in contemplation of service of a notice under section 146 Law of Property Act 1925' - this should mean you can recover legal costs of a small claim for the service charge as a 'administrative charge' against the leaseholder, even if the matter is transferred to the First Tier Tribunal for assessment.

I am presuming that the lease has a 'cause no nuisance to others' clause or similar. The leaseholder is responsible for their tenant's behaviour in this respect. However, before a section 146 notice can be served and forfeiture threatened, you would need a court of tribunal to decide there has been a breach of lease. Evidence will be key for this - so witnesses, records, diaries of
the events. Again, the costs of bringing a Tribunal application for determination of breach of lease should be recoverable as an admin charge from the leaseholder, assuming the s.146 clause above is in there.

Certainly the leaseholder's lender should be copied in to any letters before action.

Breach of lease applications are not straightforward. I would recommend legal advice and assistance. It will cost, I won't pretend otherwise, though should be recoverable from the leaseholder in the end, unless the lease is very unusual. My firm - Anthony Gold - does this work, but there are other very good firms that have leasehold management specialists too.

LVW4

10:31 AM, 20th May 2017
About A year ago

Reply to the comment left by "Chris Clare" at "15/05/2017 - 14:44":

I was in dispute with one of my freeholders over spurious service charge costs, but ensured I paid the ground rent, and informed my mortgage company, who agreed not to pay the freeholder anything without reverting to me. The freeholder finally stopped corresponding, and the next I knew, my mortgage company informed me they had paid the freeholder due to me breaching my lease for non-payment of ground rent. They added £700 to my mortgage, which included the disputed service charges!

I eventually had the money 'refunded' against my account, but the point is, the mortgage company will often pay up, and add the amount to the mortgage. You may get the amount owed. Unfortunately, they are unlikely to help with the anti-social behaviour.

Genghis Perriaman

14:12 PM, 14th February 2018
About 8 months ago

Reply to the comment left by Lou Valdini at 20/05/2017 - 10:31
Could someone please recommend a solicitor who specialises in leasehold property service charge arrears and breach of lease - thanks for the advice however I haven’t seen the details of a recommended solicitor

LVW4

15:44 PM, 14th February 2018
About 8 months ago

Reply to the comment left by GP at 14/02/2018 - 14:12
Looks like Giles Peaker of Anthony Gold, in the comment above, may be able to advise you. Good luck.

Genghis Perriaman

12:41 PM, 26th February 2018
About 8 months ago

Thanks for the recommendation to Giles Parker of Anthony Gold however I’ve since been in touch with them providing my case details and they are not able or willing to help.

Any other recommended solicitors ?


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