Ground rent debt passed to collection agent who has quadrupled fees?

Ground rent debt passed to collection agent who has quadrupled fees?

9:26 AM, 4th February 2022, About 2 years ago 9

Text Size

We invested in 2 units in a block of student accommodation being built 8 years ago, and the investment has been fraught with problems.

We owe some ground rent to the freeholder, as for the first time without warning they are demanding the ground rent in advance for this year.

They have ‘passed’ the debt to PDC Property Debt Collection Agency who have managed to increase the debt on each unit from £250 up to £1075.00 per unit by adding Late Payment Fees, Client Admin Fees, Referral Fees, PDC Instruction fees, PDC Additional costs.

Are they allowed to do this?

We have had no warning that this would be passed to them from the Freeholder or any statement of possible charges etc. and barely a week to sort this out before their client takes further action ‘which could include possession’.

Any advice on how to tackle this would be much appreciated.


Share This Article


Mike in Worthing

10:17 AM, 4th February 2022, About 2 years ago

Hi Susan. First step is TO READ THE LEASE. Ground Rent is payable in arrears unless the lease says otherwise.
Secondly debtor must be given a "reasonable time" to pay. There is no legal definition of that but it appears you haven't been given enough notice.
Thirdly admin fees must be reasonable in amount. Leases usually stipulate to pay the freeholders costs without more detail than that.
You should write to PDC detailing the above.
A good opening gambit is: "Which clause of the lease is the freeholder relying on to..."
Hope this helps.


10:25 AM, 4th February 2022, About 2 years ago

I am not a fan of PDC Law ... who, in my experience, do not check the facts before accusing leaseholders of wrong-doing.

The starting point in fighting such a case is, as usual, RTBL ... Read The Bl**dy Lease. Ascertain what the ground rent is; e.g. £150 per annum ... and when it is due; e.g. annual in advance on [date], or quarterly in advance on [dates]. Check that amount and dates against what you've been accused of not paying. If they don't match - you have a defence.

Next, despite what it says in the lease about ground rent being due "whether formally demanded or not" the law changed on this. For ground rent to be legally due and payable, the landlord (normally via their managing agent) needs to serve a valid notice under section 166 of the Commonhold & Leasehold Reform Act 2002. (See here >

The information to be provided in the notice is 'prescribed' and thus a notice which does not contain all of the right information will be invalid. Furthermore, the notice must either a) be served between 60 and 30 days in advance of the due date stated in the lease, or b) the ground rent is due not less than 30 days after service of the notice.

Your second line of defence is therefore - the landlord did not serve valid s166 notices for each of the bits of ground rent becoming due.

Of course, the landlord (via their managing agent) may indeed have served the notices - but you weren't at that address. This is often the case for buy-to-let landlords. Consequently, you need to have notified the landlord (and managing agent) of your correspondence address. Did you do that?
Was your correspondence address sent by email to them, for example?
Was your correspondence address detailed in the Notice of Assignment or Notice of Charge, which would have been sent by your solicitor when you purchased?
Has the landlord or managing agent confirmed they know your correspondence address by writing previously to the correct address?

If you think you have any or all of the above defences - then you should write to PDC Law ... with a copy to the managing agent ... and a copy to the freeholder/landlord ... to point out their deficiencies. You should send that in writing, by Special Delivery so you can prove your letters arrived. And in that letter, you should invite them to withdraw their incorrect claim AND all the associated costs.

If they withdraw - great.

If they don't withdraw - get the claim referred to the First-tier Tribunal (Property Chamber).

Furthermore, RTBL to see if the lease provides for the additional costs and fees which PDC will have added to the debt. If you can't find the relevant clauses - ask PDC to state exactly which lease clauses they are relying upon.

Happy to help further if needed.


Of course, it would be better to avoid such problems in the first place. So any leaseholder who does not reside at the flat should make sure they notify the freeholder/landlord ... and any managing agent ... in writing AND get that notification confirmed.

Then you should RTBL and ascertain when ground rent is due, and how much. Diarise the dates and watch out for the s166 notices. Contact the freeholder or managing agent if the notices don't arrive.

Judith Wordsworth

12:22 PM, 4th February 2022, About 2 years ago

Bernie Wales has said it all.

Always read your lease for Lessee obligations

Quincy Chen

13:50 PM, 15th February 2022, About 2 years ago

Reply to the comment left by BernieWales at 04/02/2022 - 10:25
You said: "The information to be provided in the notice is 'prescribed' and thus a notice which does not contain all of the right information will be invalid."
If my name was spelt wrongly in the ground rent demand notice, and I am late in payment, do I have a case to dispute the huge extra charges?


17:31 PM, 15th February 2022, About 2 years ago

Reply to the comment left by Quincy Chen at 15/02/2022 - 13:50
Quite possibly, yes. The devil is always in the detail.

Quincy Chen

15:31 PM, 16th February 2022, About 2 years ago

Reply to the comment left by BernieWales at 15/02/2022 - 17:31
Thanks for your reply. I pointed that out in my email to them on Monday, and I am waiting for their response. Hopefully, you are right and it will be good news.

Donna McGuinness

22:36 PM, 14th July 2022, About 2 years ago

I am in in a similar situation were I have been served notice from a debt collecting company for unpaid ground rent to which I have not received any invoices. They have allegedly emailed them to me and the debt company have now forwarded a copy of the invoice that was allegedly emailed to me which doesn’t give the correct name. Did you get anywhere with this clause?


14:30 PM, 15th July 2022, About 2 years ago

Emailing ground rent demands is highly likely to be non-service. Read your lease to see how 'notices' are to be sent. I'm pretty sure email will not be in there. Consequently, they have not satisfactorily served the notice - therefore, the ground rent is not due.

PM me if help needed.

Carl Mir

20:28 PM, 19th November 2022, About 2 years ago

Hi Guys,

This page has been a blessing.ive learnt so much. I'm in the same situation being chased for ground rent which is triple the cist because of fees on top because it was sent to the property and I live elsewhere. @berniew you have been so helpful.@quicy Chen

My ground rent bill is in a Ms format when I'm a Mr and also says dear madam. Is this grounds to not pay?

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now