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Ash
Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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, I failed to pay service charge and ground rent on my

Resolved Question:

Hi,
I failed to pay service charge and ground rent on my leasehold for a number of months due to a couple of reasons:
1. The standing order failed as the management company changed hands
2. I relocated due to work and did not receive the correspondence
3. I sent my change of address instruction to the old management co instead of the new, so the new company claimed not to have my address details.
I realised this issue when I relocated again so got in touch with the new management company (once I had worked out who they were) to rectify the standing order and catch up with payments.
When I contacted them I discovered that they had referred my case to a solicitor to recover the funds as they had not been able to contact me (although my telephone number had not changed).
I contacted the solicitor who forwarded a letter and bill for the service charge & ground rent i owed (£856) PLUS an administration and legal fee charge of £728.
Now, I acknowledge that it was largely my fault for not managing my correspondence address as well as I should have done, but it was never my intention not to pay the charges and it was me who got in touch off my own back.
I realise that they are entitled to charge an admin and legal fee however, only one that is reasonable.
I feel that this charge is not reasonable in the circumstances, so I offered to pay the service charge & ground rent portion, (not in dispute) so I would no longer be in breach of my lease agreement whilst I sought advice on the legal fees. They would not allow me to do this. So, I asked for a breakdown of their fees, they sent me a description of them but not what I would consider a breakdown i.e. activity - hours x rate etc.
they said they were not obliged to do this.
So, all in all I feel like they can charge whatever they like and keep me in breach of my leasehold agreement until I pay their ransom
Do I have a leg to stand on?
Can I enter a dispute without ultimately getting a CCJ that will ruin my credit rating?
Or do I just have to concede to this Legal blackmail?
Please advise?
thanks
MJ
Submitted: 2 years ago.
Category: Property Law
Expert:  Ash replied 2 years ago.
Alex Watts :

Hello my name is ***** ***** I will help you with this.

Alex Watts :

Have they provided you with a detailed work breakdown of the £728 claimed?

Customer:

They sent this:

Customer:

With regards ***** ***** breakdown of the costs, our legal costs cover:



  1. Acknowledgement and review of instructions, full review of lease, reconciliation of figures, calculation of interest, running conflict and money laundering checks, setting up a file.

  2. Issue of letter(s) before action and issuing notification

  3. Handling incoming telephone calls/emails and letters

  4. Supervision in relation to outgoing correspondence and Client care


The administration charges on this account are placed by our client for the additional reminder served and also the time incurred to refer this matter to a third party and in this instance SLC Solicitors.

The administration fees incurred by our client relates to several different aspects of chasing a late payment. The charges in this case include, reviewing your account, sending out a reminders, postage, noting of the accounts, administration to process this documentation. They then review the account again to check if payment has been received, and if not they put together a file including, statements, copy invoices, summary of rights and obligation which is then forwarded to ourselves, where they have continual regular work and updates with us throughout the length of time the file is open.

The reason in which our clients chase late payments is because they have to follow the lease. The lease states a due date and all payments should be received by this date. An invoice is sent to you around 4 weeks prior to this due date giving lessees time to pay.

I will place the file on hold until 23rd March 2015 to enable you to get legal advice on this. Please get back to me within this time.

Customer:

thanks for going offline....:(

Alex Watts :

It may show I am offline when I switch screens to check my email

Alex Watts :

Yes but have they provided a work detail print? To show what work has been done and which piece of work and charge etc?

Customer:

No, thats what I asked for but they said they weren't obliged to provide that

Alex Watts :

If you are required to pay it then you are entitled to see it

Alex Watts :

If not then you can ask them to commence proceedings and you can invite the court to detail assess the costs

Alex Watts :

The Judge can go through line by line and see how much time they have spent on each piece of work

Alex Watts :

The buzz word at the moment is reasonable and proportionate.

Alex Watts :

Can I clarify anything for you about this today please?

Customer:

But by going to court, doesn't that mean I will have a CCJ against my name. I can't afford this as I am trying to apply for a mortgage this year

Alex Watts :

No, if you pay a CCJ within 28 days its cancelled and wont show

Alex Watts :

You are not saying you don't owe it, you are asking the Court to assess costs thats it

Customer:

So what is my next move?

Alex Watts :

Ask them for a detailed print otherwise you will invite the Court to assess their costs by detailed assessment

Customer:

ok great. Many thanks

Alex Watts :

Can I clarify anything else for you today?

Customer:

What do you anticipate their response to be?

Alex Watts :

Their response is likely to be we will go to Court then.

Alex Watts :

But do not be bullied, you are entitled to have the costs assessed and see what time they have spent on what work

Customer:

Am I likely to incur additional costs this way or do you think the court will reduce the fees in my favour?

Alex Watts :

If the Court rules in your favour then no

Alex Watts :

If the Court rules against you there will be some more limited costs

Alex Watts :

Generally fees would be reduced by about 20%

Customer:

How long will this usually drag on for and will it stop me from selling my flat and applying for another mortgage?

Alex Watts :

It can take 6 months to get to Court. It should not stop you selling etc.

Alex Watts :

Of course you could pay under protest and sue for a return of the disputed sum

Alex Watts :

Does that help?

Alex Watts :

If this answers your question could I invite you rate my answer before you leave today.


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