Suing a Freeholder – Anyone with experience?

by Readers Question

14:10 PM, 30th April 2018
About 7 months ago

Suing a Freeholder – Anyone with experience?

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Suing a Freeholder – Anyone with experience?

I would really appreciate any advice on this issue please.  A few years ago due to unemployment and a prolonged period without any rental income, I got into arrears with my service charge. Nothing too big £350.

After resuming the monthly payments and contributed towards the arrears, I noticed discrepancies on my accounts. So I challenged them and provided receipts and bank statements to show the sum owed was no longer £350.

Without any prior warning or the customary “Letter before Action” my Freehold Co. and/or it’s RMA took legal action by issuing a Country Court summons, but not to my home address as held on their files, but to the flat, 200 miles away.

Long story short;  the Court case was cancelled due to many issues including I was able to prove the figure as my arrears was only £150, neither Freeholder nor their RMA had met with LTA in the issuing legally compliant Service Charge demands and the summons being sent to a wrong address.

All parties agreed to this figure as the debt, the solicitors, Freeholder and myself.  It was offered if I paid the £150 all the legal costs/fees would be waiver.

However, following this and for another 2 years I had a “charge” attached to my Leasehold account, showing a debt of £2,500.  But with no reference to its reason.  When I enquired I was told it was their solicitors fees.  When I contacted the solicitors they denied this was so, also saying they had not been paid by anyone.

A further 2 years of my attempts to have this “charge” removed came to nothing. So I had to employ my solicitor, this has cost me over £1200+vat with another law firm to have the charge removed.

Now I am really struggling to claim my legal expenses back off my Freeholder. They have Professional Indemnity cover and the insurer’s solicitors are digging in with all manner of denials and bull.

Any help or advice would be welcomed, please?  Oh yeah, been down the road of the far from helpful Lease Advisory Service, (joke).

Many thanks,

BB



Comments

trevor white

13:54 PM, 1st May 2018
About 7 months ago

If your case was settled by consent/Tomlin then the other party would not be able to recover costs forming part of the settlement. No info has been supplied relating to the terms of settlement.
Your settlement should state "full and final settlement", except for enforcing the terms of the settlement agreement.
The Landlord may be attempting to rely on a costs recovery clause in your lease.
You should read Chaplair Ltd v Kumari-Court has power to order a tenant to pay the landlord’s ‘contractual’ costs pursuant to the terms of the lease.
You should seek legal advice.

Tango1234

1:45 AM, 2nd May 2018
About 7 months ago

Reply to the comment left by trevor white at 01/05/2018 - 13:54
I've seen some worrying postings regarding the affect of Chaplair Ltd v Kumari. What is the truth? Does it mean that regardless of win or lose, in the small claims court, the management company if they have a costs clause in the contract/lease they can come after you for legal costs. Or do they have to actually win the costs in court to claim it back.

trevor white

23:22 PM, 2nd May 2018
About 7 months ago

Reply to the comment left by Tango1234 at 02/05/2018 - 01:45
The situation is that if the lease (which is a contract legally binding you) has a costs recovery clause that clause operates independently of a judgement of a Court.
The Landlord though, should not be able to recover if they have settled with you agreeing not to in effect invoke the clause. To be safe reference should be made to the costs recovery clause in any such settlement.

BB

8:15 AM, 5th May 2018
About 7 months ago

Thank you fellas for your response and yourself Trevor for the advice.
The solicitors for the landlord company did offer me the "Tomlins Order " option, but after reading up on the internet and not likeing it's implications, I turned them down. As I was so confident of my position and felt I did not have to accept what was correct with any previso or hidden agenda.

Some weeks later the same solicitors offered a "Full and Final Settlement", when the true and correct sum of arrears was realised and all agreed to.

So does this now pave the way for me to make a claim against my Landlord to recover my legal fees involved in fighting inaccurate accounting, a Freeholder who was non compliant with service charge demands and a spurious & unlawful charge being attached to my lease for 2 years?

Thank you BB

trevor white

10:41 AM, 5th May 2018
About 7 months ago

The key thing here is that if your lease contains a recovery clause you would have to show that whatever you agreed to suspended the invoking of such a clause. The clause usually operates independently of an outcome in a claim/dispute.
It is usually drafted such that all costs incurred by a landlord regardless of fault/outcome are paid by the tenant.
You are contractually bound by all terms in your lease which a Court will not usually interfere with.
The issue is what you signed up for as opposed to what is fair/unfair.
This issue i believe has attracted Goverment/interested bodies etc attention.
It would appear to be a grossly unfair contract term.

BB

8:52 AM, 6th May 2018
About 7 months ago

Thank you very much Trevor, it seems you know your stuff on such matters.
Would it be your opinion, the fact that my landlord Co. did not and still does not issue any, let alone the correct Service Charge demand, accompanied by Summary of Tenants Right and/or all other required document each and every year, such as summary of expenditure etc. This being compliant to LTA requirements, failure makes collecting and recovery of any debts illegal. If these are not produced any arrears of 18 months or older are nor recoverable under Section 21 of LTA 1985, often referred to as "the 18 month rule".
Thank you

trevor white

11:21 AM, 6th May 2018
About 7 months ago

Reply to the comment left by BB at 06/05/2018 - 08:52
Yes i agree with you on the issue of enforceability. A Tribunal would make an order/ruling on costs but that ruling cannot conflict with a costs recovery clause in the lease in favour of a landlord. The clause acts as an insurance policy for the landlord as regards costs however incurred. (i obviously have not read your lease, so am making a general statement)
You should be able to claim/claw back the entire sum demanded/paid as service charge going back 6 years.

BB

14:33 PM, 12th May 2018
About 6 months ago

Thank you very much once again Trevor. Firstly I shall have to review my Lease thoroughly to see if there is a "Cost Recovery" clause.
As you are obviously well acquainted,
or it would seem to me with matter such as this. So please where would this clause appear on a generic Leasehold?

Finally the last paragraph of your comment:-

"You should be able to claim/claw back the entire sum demanded/paid as service charge going back 6 years"

Is this set in law Trevor? As I am not familar with this. So please again, I d be very grateful if you could point me in the right direction as to where to find it.

Thank you very much.
BB

trevor white

15:36 PM, 12th May 2018
About 6 months ago

Reply to the comment left by BB at 12/05/2018 - 14:33
Not all leases contain such a clause (costs recovery).Some are silent on it except for the costs of enforcing the specific provisions in the lease. Your lease might for example only deal with costs incurred by your Landlord where forfeiture, consents, etc required are dealt with.
Where a lease contains no such clause (recover) the issue becomes one of what is reasonable. Were the costs reasonably incurred becomes the issue.
Going back 6 years refers to the Limitation Act 1980.
Applying the Act above you are limited to the last 6 years as regards claiming back sums paid over as regards unenforceable service charge demands.
Note that a tainted demand makes the whole sums demanded/payed, repayable to the leaseholder.

BB

4:10 AM, 13th May 2018
About 6 months ago

Reply to the comment left by trevor white at 12/05/2018 - 15:36
Thank you Trevor, I really appreciate your advice and I shall have a look into this. I would think from what you ve said, that you are either a solicitor, or involved in the leasehold/freehold business, correct? As I don't want to go off all guns blazing if this is not 100% correct. It's very strange how two separate solicitors working for me never mentioned this possibility. As I have had no, zero S C demands since 2005.

Thank you,
BB

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