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propertylawyer
propertylawyer, Solicitor
Category: Property Law
Satisfied Customers: 270
Experience:  Property solicitor with expertise in commercial and residential property transactions.
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I am a leaseholder who has owned a the property months. I am

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I am a leaseholder who has owned a the property for 9 months. I am about to exchange on a sale. The freeholder is claiming 10 years of arrears of ground rent (£100 pa) and 10 years of arrears of service charge (total for whole building he claims in LPE1 is £775 pa. My own solicitor is not being particularly helpful, and we risk losing the sale. The lease says - "to pay to the landlord towards the cost of the services and other things hereinafter covenanted to be performed by it and its administrative expenses and maintenance charge a payment (therinafter called "the service payment") being one half of all sums expended by the landlord in performing its obligations as contained in this lease"
The other freeholder has not received any demand for work over the last 6 years, the landlord has not performed his legal obligations under the lease in terms of maintaining the common parts. We have done the external work at our own cost to all common parts. We have photographic evidence of this and written confirmation from the other leaseholder that no work to common parts have been done and no demand for service charge has been received.
In order for a quick outcome, we will agree to pay 6 years ground rent, and 50% contribution to his claim for the service charge being £775 pa. Please advise
Assistant: Thank you. Can you provide any more details to help us find you the right Expert?
Customer: what further detail would you require
Submitted: 8 months ago.
Category: Property Law
Customer: replied 8 months ago.
The property was initially purchased via an auction with an absentee landlord. after completion of sale I eventually located the landlord, in order to rectify a defective lease. He had ignored solicitors letters for 5 weeks requesting him to contact them. Only after a personal visit by myself to his place of work found via companies house, did we finally get in contact with him.
Expert:  propertylawyer replied 8 months ago.

Hi there

Under contract law, the lease is a contract too, you are only liable for 6 years of arrears. Anything else is prevented under statute of limitations. Your offer to pay the 6 years' ground rent is reasonable, the landlord cannot demand more.

I take it in lpe1 the landlord is claiming £7750 in total? Again, the 6 year rule applies and can only claim a max of 775 x 6 , £4650.

What does the lease say on services/service charge? Is there a provision setting out the landlord's obligations to provide service charge accounts etc?

Customer: replied 8 months ago.
the £7750 is in relations to the whole property - 2 leasehold agreements. The other leaseholder has never paid nor has ever had a demand for any contribution towards a service charge, The only thing the lease says in relation to a service charge - "to pay to the landlord towards the cost of the services and other things hereinafter covenanted to be performed by it and its administrative expenses and maintenance charge a payment (therinafter called "the service payment") being one half of all sums expended by the landlord in performing its obligations as contained in this lease"
Expert:  propertylawyer replied 8 months ago.

The amount for the whole for the 6 year period which can be legally claimed is 4650 and your half share is 2325.

Expert:  propertylawyer replied 8 months ago.

Do also note:

Most tenants of residential premises benefit from protection against excessive service charges under the Landlord and Tenant Act 1985. For the purposes of this legislation, "service charge" is an amount which:

  • Is payable by a tenant of a dwelling as part of, or in addition to the rent.

  • Is payable directly or indirectly for services, repairs, maintenance, improvements, insurance or the landlord's management costs.

  • Varies, or may vary, according to the relevant costs. Fixed service charges are therefore outside the scope of the provisions of the LTA 1985.

Costs must be reasonably incurred.

Before making any demands for service charge the landlord must ensure that it has supplied to its tenants an address in England and Wales for service of notices. Until this notice is served, no rent, service charge or administration charge is due from the tenant.

In addition, any demand for service charge must:

  • Contain the name and address of the landlord.

  • Be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.

Tenants are entitled to withhold payment of a service charge, if the relevant demand does not include the summary of rights and obligations which is required under section 21B (section 21B(3), LTA 1985).

When service charge demands are issued after completion of the works or provision of the service, the landlord must issue the demand within 18 months of the landlord incurring the cost. If the demand is provided later than this, the landlord cannot recover the costs at all, unless a notice is served during the 18 months stating that costs have been incurred and that the tenant will be required to contribute to them by payment of a service charge (section 20B, LTA 1985).

Tenants have statutory rights:

  • To seek a summary of the service charge account from the landlord (section 21, LTA 1985).

  • To inspect accounts, receipts and other documents relating to the servicecharge summary and to take copies of these (section 22, LTA 1985).

  • To request a summary of insurance cover and to inspect insurance policy documents (section 30A and Schedule 1, LTA 1985)

as you can see you have rights which you can challenge the landlord's claim. Particularly in a variable, ad hoc provision such as the one in your lease. You can request copy accounts, receipts etc. If the landlord can not evidence expenditure and particularly in circumstances when more than 18 months ago then the landlord's position is weakened and you can challenge. You have a statutory right.

It is a criminal offence for a landlord to fail to comply with the duties imposed by s.21,22 and 23 of the LTA as mentioned above.

I hope this information helps. Let me know if you have any further questions or queries. Happy you help.

Can I please ask you to accept/positive rate my assistance so that I receive credit for assisting you. Thanks.

Customer: replied 8 months ago.
Thank you, ***** ***** extremely helpful
Expert:  propertylawyer replied 8 months ago.

I am glad you find the advice helpful. Do let me know if I can help further.

I must ask again if you would please accept /rate my response. Otherwise I will not receive credit for helping you. Thanks.

propertylawyer, Solicitor
Category: Property Law
Satisfied Customers: 270
Experience: Property solicitor with expertise in commercial and residential property transactions.
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