Our RTM company has a Non paying leaseholder

by Readers Question

16:13 PM, 23rd January 2017
About 2 years ago

Our RTM company has a Non paying leaseholder

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Our RTM company has a Non paying leaseholder

We have a small block of 5 flats, landlord and previous management company did nothing to maintain it, so we have formed a RTM company to manage it ourselves. non paying

One of the flat owners claims the landlord and previous management company owe her compensation for various things that were wrong in her apartment from purchase date. Because of this she is refusing to pay any service charge to the new RTM company and is now 7 months in arrears.

As there are only 5 apartments we will not be able to subsidise her much longer – do you know what steps we should take to try to get the outstanding service charge?

And we assume as her gripe is with the landlord and previous management company we are entitled to the service charge from the date the RTM company took over?!

Thanks

Lindsey



Comments

terry sullivan

10:09 AM, 24th January 2017
About 2 years ago

scc?

LVW4

11:33 AM, 24th January 2017
About 2 years ago

Been through 2 RTMs and one RTE. I had a dispute with one of the previous Managing Agents (owned by the Freeholder), and had to resolve that separately from the new RTM, of which I am a Director.

This is a very difficult situation because I assume you all know each other, and things are 'personal'. That's the value of having a 'professional' Managing Agent 'controlled' by the RTM Co, but acts impersonally for the Company.

You will fall out with them, but 'subsidising' them is unfair on everyone else. The debt exists and you need to issue the necessary notices.

John Pettman

14:28 PM, 24th January 2017
About 2 years ago

If the Leaseholder has a dispute with the freeholder that is a matter between her and the freeholder and on the face of it Its nothing to do with you . . I would suggest download a copy of the leasehold title from the Land registry and you will see if she has a mortgage . Write to her and make it quite clear if payment is NOT received her mortgage lender will have to be advised . She will have difficulty selling the property and further the building insurance premium may not be paid if you do not have the money to pay it, and further eventually you may have to commence forfeiture proceedings Advise her if she has any doubts to seek her own independent legal advise Now is the Leaseholder a member of the R.T.M???? If you get no satisfaction you need to write to the Mortgage lender making it clear that you are a R.T.M NOT the freeholder and that if payment is NOT received their security is quite likely not be insured. I have found that the majority of lenders have paid and just put it on their clients account although one lender insisted that a section 146 had to be served first . My experience has been that people will often try and allege the slightest excuse for withholding the whole of any service charges . I have had one person who alleged that the lighting in the common parts was not good enough yet another alleged money was wasted because of too much lighting . Both withheld the whole of the service charge. Best of luck
John Pettman

David Aneurin

12:14 PM, 28th January 2017
About 2 years ago

Most leases require the service charges with no set off, as can be seen leaseholders seem to use any excuse for not paying some or all of the charges. If the leaseholder has any dispute it is up to them to take that through to the land tribunal.
You may have to go to court to obtain judgement before any loan company will pay and add it to the mortgage.
With regard to issuing a section 146 you would need the co-operation of the freeholder and that in itself could be a problem. Have you thought about buying the freehold then the freehold and management could all rest with one body.
I also assume that when you took over as the RTM that you given the balance of funds. It would also mean that you were also owed all the outstanding fees not just from from when the company took over.

Jean-Charles Nicolas

10:12 AM, 2nd October 2018
About 3 weeks ago

I am a bit in the same situation as Lindsey. I just bought a flat in a converted house with 4 flats. One of the owner is apparently not keen on paying his share of building insurance and paying any outstanding debts he owes to the RTM. The RTM plan to redecorate the building. How do we make sure everybody pays a fair amount ? thanks

terry sullivan

10:58 AM, 2nd October 2018
About 3 weeks ago

contact his mortgage company--they will contact lessee--worked for me recently

LVW4

11:45 AM, 2nd October 2018
About 3 weeks ago

Reply to the comment left by Jean-Charles Nicolas at 02/10/2018 - 10:12
It is not your responsibility to ensure the other owners pay their share, and it shouldn't affect how much you pay, or whether the decorating is done. It is the Freeholder and the RTM Co who must chase the debts, and take whatever action needed under the law. It's not nice if you all know each other, but that's the value of having an independent RTM Co to manage the service charges and ground rent collection. If the co-owner has a mortgage, and the RTM Co doesn't want to go to court, then the RTM Co can request payment from the mortgage company. The debt would then be added to the owners mortgage.


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