Absent Owner and Nonpayment of Management Fees?

Absent Owner and Nonpayment of Management Fees?

8:09 AM, 18th July 2022, About 2 years ago 17

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The owner of a flat in a development where I also own a property has not paid any fees or ground rent for at least four years and current arrears are approaching £5000.

I understand the flat, which was inherited by the current owner at that time, is in a poor state of repair and unliveable. He has been contacted by letter and email several times by the managing agents, but there has been no response. They now wish to use a solicitor to review the case and write to the owners.

This apparently will cost around £800 and if again, there is no response, will cost considerably more to then take it to the small claims court, which would be the next step.

I feel that this could be the top of a very costly slippery slope. I have suggested that an effort to speak to the owner and perhaps persuade him to sell the flat would be an alternative first step. However, I have been told by the agents that this is outside their remit.

As a director of the owners/residents assn., I have been asked for consent for the agents to proceed with solicitors, hence my involvement.

I would love to have other members’ advice or comments.

Anne


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Crossed_Swords

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10:05 AM, 24th July 2022, About 2 years ago

Forgive me if I have misread the OP but it seems to clearly state that this is a freehold company owned by the leaseholders and the poster is the Secretary. Therefore not getting involved is not an option, they ARE the freeholder and the money is obtained on their behalf. I would assume the above processes have already been carried out by the agent.

There are then 2 options: wait until the flat is sold when any money owed can be recouped from the proceeds or go to court. The poster has been asked for permission to do this as is correct procedure. They should get approval of the shareholders to do this so first step is to get the agent to circulate a written resolution or have a general meeting to decide. Since this will include the non-payer this might focus their minds.

No response may mean he is not there since it is inherited so has not received the demands. Is the property let or empty? You could arrange for them to be sent to the solicitor who handled the transfer after the inheritance or just knock on the door and ask if you are local.

Worth reading the lease to see if interest is permitted to be applied.

Legal costs would have to paid initially by the communal funds but should be recoverable from the non-payer. Whoever is instructed should be able to advise on the process

Crossed_Swords

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10:11 AM, 24th July 2022, About 2 years ago

On re-reading the post, not sure why a solicitor needs to review the case, they just need to write a standard letter which will not cost £800. The small claims court fee for £5-£10K is £455. It might be possible to do it online without involving a solicitor but you or the agent need to have all the demands and correspondence available to upload

Accidental LL

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10:54 AM, 24th July 2022, About 2 years ago

Anne
You need to be very clear about the legal relationship regarding the property freehold etc.

Forget the rest unit that is said.

Mervin SX

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11:58 AM, 24th July 2022, About 2 years ago

Hi Anne,

You own an apartment in this block of apartments. So, you are rightfully a member or at least have a voice in how the building is managed. So, don't stay out of this mess - get involved.

From what I am reading, your Managing Agent has come to you to approve their intention to recover costs. I would advise similarly to CMS - i.e. ask the Managing Agent to carry out a quick Land Registry search on this non-paying leaseholder to see if there is a mortgage on the property.

If there is a mortgage - recovery is pretty simple. The Managing Agent can then either write to the mortgage provider of the non-paying Leaseholder or several legal firms will take on the case on a no-cost basis (I have used Bradley Solicitors in the past).

If there is no mortgage - you will need to go down the route to gain a CCJ but enforcement may not guarantee payment of overdue charges.

I hope this helps.

Regards,
Mervin

Crossed_Swords

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14:32 PM, 24th July 2022, About 2 years ago

Since it was inherited there is unlikely to be a mortgage

CMS

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19:32 PM, 24th July 2022, About 2 years ago

Reply to the comment left by Crossed_Swords at 24/07/2022 - 14:32
I did think that but it is worth checking as its the easiest option and it may have been mortgaged up to the hilt post inheriting which would explain why the owner no longer cares about it. Best, Charles

Yellard

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0:55 AM, 22nd March 2024, About 9 months ago

Reply to the comment left by NewYorkie at 18/07/2022 - 11:12I have a leasehold with a Residents Management Company. I haven't paid service charges for nine years I do not believe they have been legally served and the charges are excessive.. I tried ten years ago to address the matter by seeking (at an AGM) replacement of the Directors of my RMC but was blocked by a retrospective (sic) claim of a large amount of non independently verified anonymous votes in favour of retaining the existing directors (and plenty of other chicanery at elections since). I have been advised by a solicitor that to use company law to pursue the matter of corrupt elections would be prohibitively expensive. I have not applied to the Property Tribunal as last time I was taken to it by the Agent for one year's arrears it was an enormous amount of effort for a win of a 30% reduction. (The Tribunal would not address corrupt elections). However I am prepared for the Residents Company to take me to the Tribunal again. I don't fear forfeiture as I have paid the ground rent to the separate entity of the Freeholder. That the Agent for the Residents Company has waited, so far, waited none years without starting legal proceedings says everything about the validity of their service charge demands. If they win at Court, I will, of course pay..

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