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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I owed £1700 charge on my flat, (an owned property). I

Resolved Question:

I owed £1700 for service charge on my flat, (an owned property).
I had trouble paying due to other emergency problems.
Like a leak which cost £1800 which the managing agents said I needed to fix quickly.
I explained I could but would use the money set aside for the service charge.
And it would be some time before I had money for both.
I kept them informed at all times.
I sorted a bridging loan which came through this week.
When contacting the agents to make payment, I was told to pay solicitors as had been passed to them.
I emailed explaining I had not been contacted by any solicitors.
I explained I believed it in appropriate to refer to solicitors as I had not been ignoring the problem.
I asked them to contact the solicitors and tell them the problem was in hand and not to incur any fees unnecessarily.
I then paid the bill by transfer to the agents in the usual manner when the money arrived.
Two days later, (today) I have got an email from their solicitors who want to charge me for their services even though I paid before ever hearing from them.
Also the agents work for us, (the 17 resident owners of the property) as I fully corresponded with them at all times and explained my problems and what I was doing to remedy etc etc..., can they still ask me to pay the solicitors?
Thanks,
Gary
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I ask how long there was between the intial demand and their instructing solicitors please?

Joshua :

Is there a provision in your lease that allows for the recover of legal costs for no payment of service charge - there usually is but not always?

Customer:

Yes there is a provision in the lease.

Customer:

There was a number of months between due date and instructing.

Customer:

My point is that I tried to keep them informed and actually paid before being contacted by te solicitor.

Customer:

As they knew i had problems and I kept them abreast of the situation adding to my burden with extra solicitor bills.

Customer:

When i was doing my best.

Customer:

I even sent them copies of loan details showing I was genuine. and that the delay was not my fault.

Customer:

the mortgage provider lost some of the paperwork.

Joshua :

Thanks. Finally have you reveived a demand for payment from the solicitors and if so, is it accompanied by a statement of your rights and obligations in relation to that charge?

Customer:

We have been instructed on behalf of your landlord to claim from you the sum of £1,837.08, being ground rent and service charge arrears along with interest and legal fees in respect of the above property pursuant to the terms of your lease/transfer document.



The breakdown is as follows:-



Total arrears £1,700.00


Interest £26.08


Issue of Letter Before Action & associated costs £90.00 plus VAT


Office Copy Fee £3.00


It is important to appreciate that payment of your service charge is not only required pursuant to the terms of your lease/transfer document; failure to pay service charge results in a deficit in the service charge fund which only serves to increase the service charge payable in any given year. Clearly this is not in your interest nor the interest of your fellow residents and we urge you to pay the debt at your earliest possible opportunity. You may also be aware that you are in fact a shareholder in the RMC. In defaulting on your service charge you are failing in your duties as a shareholder.


If you have any queries with your service charge which is preventing you from paying, we are happy to discuss those queries with you free of charge. Please note however if you ask us to make further investigations for you after your initial phone call or written contact (for example obtaining a copy of your lease or service charge invoices or seeking instructions from your agent) further charges may become payable. Please see attached sheet.



If you fail to respond to this letter within the next 14 days, we have been instructed to issue court proceedings for recovery.



In such proceedings we shall seek, in addition to the principal sum already due, court fees, solicitors’ costs and interest from the time the sum became overdue to the date of payment.



It is important that you pay on time and directly to us to prevent further costs form accruing.



Should you make payment after 14 days from the date of this letter the above costs are likely to be payable by you despite your late payment.



If you make payment directly to our client, your payment may not be reported to us in time before further costs incur. You will be held responsible for any such costs.



Please note any solicitors’ costs accrued can be claimed through the service charges pursuant to the terms of your Lease. If those solicitors’ costs are claimed through the service charges, it is you and your fellow residents who will be paying the management company’s costs of this litigation.



Payment can be made by cheque payable to Brady Solicitors Limited or alternatively you can pay with a valid credit or debit card over the telephone by calling us on the number below.



We also accept payments by bank transfers and these can be made to the following account details:-



Account: 56234217


Sort Code: 40-51-62


IBAN: GB82HAND40516256234217


BIC Address: HANDGB22


Name: Handelsbanken


Address: Nottingham Branch, City Gate East, Tollhouse Hill, Nottingham, NG1 5FS



Please also note that once judgment is obtained against you, it is open to our client to forfeit the Lease, which would end your Lease and your ownership of the propertyand you may be evicted from your home.



Please address any further correspondence on this matter direct to ourselves at IMPERIAL BUILDING, VICTORIA STREET, NOTTINGHAM NG1 2EX quoting the reference above. If we have not heard from you within 14 days, we are instructed to commence proceedings without further notice to you.



Should you not deal with this letter the costs will increase and you will ultimately be responsible to pay them.



This is an important matter and we urge you to seek independent legal advice as soon as possible.


Customer:

Their letter said:

Customer:

I believe this letter was written after the event.

Customer:

Simply..., is it right for them to appoint solicitors when I was trying to sort the problem and keeping them abreast. they could see I had a bridging loan imminent.

Customer:

And I paid before hearing from the solicitors. is that relevan

Joshua :

Thanks. Just reviewing the above.

Joshua :

Thank you for the above. The starting point is that unless you dispute the service charge itself demanded of you, that must be settled if it is not already been paid, as soon as possible as failure to pay constitutes a breach of the lease. as regards ***** ***** fees demanded the position is as follows:

Joshua :

the first step is to confirm that your lease contains a provision that allows the landlord to recover legal costs in pursuing you for any unpaid amounts due from you under the lease. If it does not, then the landlord will be unable to recover the legal costs claimed. if the lease does contain such a provision, and it must be said that most residential leases do though it should Not be assumed, then the landlord can as a starting point recover legal costs however there are caveats. Under the commonhold and leasehold reform act 2002 planes the legal costs constitute an "administration charge" under the above act. The Act requires administration charges sold by the landlord to be shown to be reasonable in the circumstances and must be accompanied with the prescribed statement of your rights and obligations in respect of payment. If the demand for the administration charges not accompanied by a statement of your rights and obligations, then the demand for the administration charge (here the legal fee) is not payable until such time as you are provided with that statement

Customer:

I accept the money is/was due.

Customer:

I am upset they have run up legal costs while I was doing all I could and they could see the money would be paid as they were copied in on my loan paperwork so they could see I was trying

Joshua :

as to whether the charge is reasonable under the Act. a party seeking costs must show that they were necessary in that they were reasonably necessary to incur those costs in the circumstances. I note your view that the agent should not have instructed solicitors in view of your candour and cooperation. There is certainly some force to this argument. If you can demonstrate that you kept the agents fully informed of your actions and circumstances throughout, this would lend best weight to that argument. If there was a period of silence on your part prior to the instruction of solicitors, this would be damaging to that argument. The difficulty from your point of view is that the lease provides that the service charge payment is due and does not provide exceptions or a means for delaying of that payment whetehr or not the reasons for delay are your fault or not. In addition, the requested, whilst unwelcome and I accept unjust from your perspective is not exorbitant. I feel this not because I disagree with anything you have said but because I do not wish to be unrealistic in what you would face if you were to dispute the charge at the tribunal. The tribunal would waive these competing arguments in deciding whether the administration fee is reasonable in all the circumstances. The more you can demonstrate that the agents were fully informed particularly in the period prior to instructing solicitors, the better your chances will be in succeeding but it would be negligent on my part to suggest there was no risk that the tribunal could find against you particularly if there was a period of silence on your part prior to instruction of solicitors.

Joshua :

if you consider that taking into account the above the charge is likely to be considered unreasonable by a tribunal, and you have been issued with a statement of your rights and obligations in respect of the solicitors charge, you may apply to a first-tier property tribunal to decide your liability to pay the charge by using the following form:

Joshua :

http://hmctsformfinder.justice.gov.uk/HMCTS/GetForm.do?court_forms_id=3080

Customer:

As I paid before receiving any solicitors paperwork is there anything in that?

Customer:

They emailed me two days after paid.

Customer:

I repeatedly told the managing agents I had not received anything from any solicitors.

Joshua :

suddenly I think if the solicitors had not yet issued the letter prior to your payment, that does have value because the agents should have notified the solicitors instructed as soon as you make payment. If the solicitors carried out work after you make payment, then this would appear to be a necessary and therefore any charges that accrue as a result of that unnecessary work would appear to be unreasonable and therefore subject to challenge under the provisions of the above Act

Customer:

Their emailed letter, (arrived today) was dated 12th march. BUT I repeatedly told the agents nobody had been in touch with me. I even suggeted to them they contact the solicitors and stop the incurring fees as I would have funds very soon. And i provided them with copies of the bridging loan confirmations of the same.

Joshua :

Payment was made on which date?

Customer:

This wednesday 20th. Dear Parkwood,


I thought I would let you see the latest emails concerning my loan.

I hope you will see I am genuinely trying to sort things out and am doing all I can to keep you informed.

I will contact you as soon as any money arrives so you know I have paid.

Thanks,

Gary

Flat 11Dear Parkwood,
I realise this situation is becoming ludicrous but here are the latest emails concerning my loan.

The Woolwich/Barclays had lost the finalised papers and have now resent them.

I have been told I will be passed funds the day they arrive.

With luck, this should be Monday.

I will contact you again on Monday to let you know.

Thank you,

Gary.

Flat 11

Customer:

IGNORE ALL THAT SORRY

Joshua :

Thanks. It appears that they were instructed before payment was made so that point is not conclusive but you could still use the above arguments to defend the demand.

Joshua :

Having said that you will need to consider the potential costs of applying to a tribunal and the time this will take if you decide to defend your position as against the level of demand. Unless you feel that the demand is significantly unjust then you may feel that the costs and time associated with a defence are not justified in face of the level of demand. However if you determine that they are justified then the above form can be used to do so.

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer:

I have downloaded the file you suggested.

Customer:

If I decide to proceed should I email the solicitors to tell them my intentions

Joshua :

If they have not given you a summary of your rights and obligations you owe nothing until they do. If they have then you can advise your position and intentions but do sleep on it so you can properly consider the position before you make your decision.

Joshua :

Is there anything else I can help you with?

Customer:

Finally, as the managing agents technically work for us, the freeholders, should they have asked us, the management committee if they should incur a debt to chase me?

Joshua :

If you have a share in the freehold, as you say, the freeholder is the agents client. The agent is entitled to act on standing instructions and their standard terms of engagement will usually include provisions whereby they will pursue leasholders under lease covenants. If they do not have such standing instructions from the freeholder then you are quite right that they would need to seek instructions before taking this action and equally, if the freeholder does not wish to pursue you then you will have to pay but of course this will require a formal decision from the freeholder through a vote. If you believe there would be support for you in this respect, you may decide to raise the matter at your next meeting or earlier

Customer:

Ok that is all. You have been great!

Joshua :

I hope you are able to reach a settlement on the matter you are content to live with. If I can assist any further as the situation develops please do not hesitate to revert to me

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer:

If need 'you' again is there a way through to you?

Joshua :

Certainly. You can contact me using the following link or asking for me in the first line of any questions:

Joshua :

http://www.justanswer.co.uk/law/expert-joshua/

Customer:

Thanks & Goodbye

Joshua :

Best wishes

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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