Leaseholder refusing to pay after Section 20 process?

Hand blocking a money bag with a pound symbol, representing refusing a payoff to a lodger

by Readers Question

12:01 AM, 21st June 2023, 3 years ago 16

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Hello, we have roof repairs to undertake and have notified leaseholders through the Section 20 process this process is completed. There were no responses during the consultation process. After this, we have received payment from the leaseholders except one, who subsequently on the request for payment has then listed objections and is refusing to pay. What are our options?

In days gone by it was possible to ask the mortgage lender to add this to the leaseholders’ loan. Is that still an option?

Thanks,

Robert

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Tags: Leaseholder consultation process, Leaseholder disputes, leaseholder refusing to pay, roof repair costs, Section 20 leaseholder, Section 20 Notice, UK advice leaseholder

Comments

Kizzie Read Full Bio

Member Since October 2022 - Comments: 409

8:03 AM, 21st June 2023, About 3 years ago

What are the objections? Has leaseholder said why they didn’t object when they received s 20 consultation notice.
Does the roof fall under the demise or are repairs the
responsibility of the freeholder?
Do the leaseholders own a share of the freehold?
Do repairs costs covered by building insurance?

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Clint

Member Since April 2015 - Comments: 468

9:53 AM, 21st June 2023, About 3 years ago

I have a slightly different situation where, I have a leaseholder that never pays his service charges and has not done so for about twelve years. I normally wait three years and then apply for a money claim with all other expenses, and after judgment send it to the mortgage company and so far have always paid so yes, I do believe you can use it for recovery of the costs..

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Dylan Morris

Member Since August 2016 - Comments: 1190

10:59 AM, 21st June 2023, About 3 years ago

Reply to the comment left by Clint at 21/06/2023 – 09:53
Just interested as to why you haven’t threatened forfeiture of the lease ?

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Robert

Member Since December 2022 - Comments: 30

11:02 AM, 21st June 2023, About 3 years ago

Reply to the comment left by Clint at 21/06/2023 – 09:53
Thanks Clint,

What do you specifically mean by Judgement. Thanks. Robert

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Clint

Member Since April 2015 - Comments: 468

11:22 AM, 21st June 2023, About 3 years ago

You apply for the money online going to the money claim website, fill in the application form, submit the application, pay the application fee. The court will then send it to the defendant (Leaseholder) and he has two weeks to respond. If he does not respond, request a judgment against him after which he will get a County Court Judgment.

You then, apply to the mortgage company for the monies and they normally pay it.

When the application goes to the defendant, if he disagrees that he owes the money, he can file a defence and thereafter there is a hearing at a local court & the judge will decide if he has a case or not & either give a judgment against him or not.

There is a bit more to it in terms of forms, attending court, etc. but all pretty straight forward I think.

You stand the best chance if they do not respond within the two week period and you request a judgment and act quickly in so doing.

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Robert

Member Since December 2022 - Comments: 30

11:27 AM, 21st June 2023, About 3 years ago

Reply to the comment left by Clint at 21/06/2023 – 11:22
Thanks Clint, very helpful

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Kizzie Read Full Bio

Member Since October 2022 - Comments: 409

2:20 PM, 21st June 2023, About 3 years ago

So this is service charge due under the provisions of leaseholders lease for contributions to landlords maintenance costs listed in the lease. It is not money belonging to the management co or freeholder. It is to protect against man co insolvency. It must be held in trust in a client /trust account in name of man co under section 42 landlord & tenant act 1985. Leaseholders have the legal right to transfer to the FTT under CLRA 2002.
Pursuit as a money claim puts the landlord in breach of lease covenants and attracts tax liability.

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Puzzler

Member Since July 2013 - Comments: 1266 - Articles: 1

5:20 PM, 21st June 2023, About 3 years ago

Reply to the comment left by Kizzie at 21/06/2023 – 14:20
@Kizzie, where is the tax liability? It is quite common to apply to the county court for service charge debt so this cannot be a breach of lease. Please explain?

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Darren Peters

Member Since January 2016 - Comments: 473

10:22 AM, 24th June 2023, About 3 years ago

Clint, why do you wait 3 years?

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Clint

Member Since April 2015 - Comments: 468

1:24 PM, 24th June 2023, About 3 years ago

Reply to the comment left by Darren Peters at 24/06/2023 – 10:22
If the service charges are not paid for three years one has grounds for forfeiture which effectively means one can take over the lease i.e. gain possession of the property

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