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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 12133
Experience:  I have been practising for 30 years.
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I settled my ground arrears account last month by Bacs

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I settled my ground arrears account last month by Bacs amounting to £147.20p, today I received a court summons and an order to pay £2480.28p various extra costs, I spoke to the ground rent company and they apparently refunded me the £147.20p back to my account, although I had paid the full arrears last month they still want to take me to court.

Hello for clarification - what are these costs for?

do you have it documented?

Customer: replied 10 months ago.
I was given a breakdown of all my arrears for ground rent on my property this was last month along with a court summons, the amount in writing that I owed was 147.20p, on the breakdown the ground rent company gave details of payment methods Bacs, Internet and standing order, I went into my bank and paid the 147.20p by Bacs, today I receive the same court summons, this time there is paperwork from another company affiliated to the ground rent company giving me a breakdown of court costs. I spoke to the ground rent company they stated that they had refunded the 147.20 and that this other company are now dealing, the other company correspondence is dated the 8th of May the court hearing is on the 18th of May
Customer: replied 10 months ago.
I am unable to call as do not have any more money at my disposal at the moment, can they repossess my property even though I have tried to settle the arrears.
Customer: replied 10 months ago.
I paid the amount in full on the 24th of April.
Customer: replied 10 months ago.
Thanks for wasting my time

The offer of a telephone call comes out automatically. It’s optional extra.

Depending on the terms of the lease, you will probably find that the freeholder/management company are able to recover the costs of pursuing unpaid ground rent. As you appreciate, solicitors costs are substantial.

Ordinarily, a sum of £147 would be recoverable through the Small Claims Court and no costs are normally paid in favour of the winner against the loser, in the Small Claims Court.

However if it says in the lease that the costs of recovery are paid by the leaseholder, then you are liable for them.

However an amount of money in excess of £2300 to recover an amount of 147 is clearly disproportionate although it depends on the number of times they have written to you in the number of times you have not replied.

In the lease it may say costs are recoverable on “an indemnity basis” which means that as long as the costs are legitimate (not inflated) they don’t have to be proportionate or reasonable. They could in theory write to you 1000 times at £25 per letter pursuing a debt of £147 and then seek to charge you £25,000 in legal costs although whether the court would sanction that or not I have no idea.

Certainly, the Management company/freeholder hasn’t done themselves any service by returning the money.

All you can do at present is defending the action although I don’t know why you haven’t paid. They cannot pursue you for the service charge unless they have sent you an account of how much is owed over what period.

I don’t know what this “other company” is and whether they have bought the Debt but they cannot pursue the debt on behalf as the freeholder/management company unless whoever is pursuing it are either solicitors or they have bought the debt. They cannot issue legal proceedings on behalf of a third party (the management company) unless they are solicitors because it’s prohibited under the Solicitors Act.

As you appreciate, although the amount of money may be relatively small, the issue is quite complicated.

Can I clarify anything else for you?

I’m happy to answer any specific points arising from this.

Please take a moment to look at the top right hand corner of the page and rate my service by clicking one of the stars at the top of the screen. It’s important you use the rating service because that gives me credit. It doesn’t just give me a pat on the head! (Although there is an incentive scheme where the more five-star ratings I get, I do actually get a pat on the head! :-)) All you need to do is press Submit. Thank you.

If you still need any point clarifying, I will still reply because the thread does not close.

Best wishes.


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