how to get money back from fellow freeholder?

[g_girl]

Hi all,

I would be grateful for some advice on the following:

facts:
(1) A freehold flat, 2 other freehold flats, no management company.
Intended to rent to 4 sharers on one AST, one freeholder demanded we stop, citing a lease clause. We took legal advice which said they are right. Cancelled signed AST, found a family (took a whole month), had to put the price down to get them.

(1a) Took second legal advice which said we can have sharers on one AST, all research confirms this too. Now we want to receive compensation from the other freeholder for the lost income and expenses which already amount to about £4500 (lost one month's rent, 12 moths of difference between the original rent and the new rent, legal expenses etc.).

(2) We know for a fact that the freeholder's flat is in breach of lease on at least 2 points - wooden floors instead of carpets and removed set of doors and one non-carrying wall. Both changes were made by the previous owner in 2005 who did not get any permission from other freeholders as required by the lease.

(3) Asked their lawyer to put forward grounds of their demand, no answer for the last 3 weeks.

question:
What would be the best way to get our expenses back without litigating (and further expenses)?

we imagine 2 ways:
(1) Wait until they decide to sell (might be years or might not, as the wife is expecting) and request that they pay us for signing transfer of freehold. Are there any dangers in them litigating us for this? Do we let them know now about our intention to charge them?
(2) Demand that they get other freeholders' (us+1 flat) permission for the changes to the flat and request that they pay us for signing such permission. What can we do if they ignore our demand for this permission (except for litigating them)?

Thanks,
G

[thevaliant]

On point 1, if I read right, you have virtually no chance of recovering from other lessee. *YOU* took legal advice which then, on second opinion, turned out to be wrong. Sue your first solicitor acting for incorrect advice.

On point 2 - Enforce covenants. This will involve legal action. Witholding transfer when they sell, probably won't work, unless the lease states that permission can be withheld (very rare) or a fee can be charged (it might, but such fee will not be very much, certainly not normally one months rent).

Personally, suck it up. It isn't their fault regarding any of the above.

[thevaliant]

Just one final point - Don't confuse the two issues above, or worse, try and threaten other leaseholder along the lines of 'Pay us a months lost rent or we won't agree to transfer of lease'. That's blackmail.

[g_girl]

Thank you, Thevaliant for your direct words. Although, I agree that the first solicitor was at fault, I still think the freeholder is wrong too, subjecting us to a 6 week long campaign of threatening phone calls, promising to change the locks for the communal entrance etc., basically bullying us to bend.
We are currently based overseas and are looking for the simplest (and legal) way to get the money back. Litigation will suck out more funds and not necessarily be successful.
So the question still stands, what can we do, given that we might have some leverage in the covenant issue, to get them reimburse our expenses?
If/when they decide to sell, how can we make sure the prospective owners know about the breaches of the lease?

[jeffrey]

If/when they decide to sell, how can we make sure the prospective owners know about the breaches of the lease?
Two ways.

1. Before completion
A. V's sol. has to supply TransAction (Protocol) information to P's sol. This is akin to the traditional Enquiries before Contract. All disputes MUST be revealed by V. Non-revelation is a breach of contract, misrepresentation, and (possibly) fraud.
B. V's sol. will also almost certainly contact f/r for details of ground rent, service charge, etc. That's the best time to disclose problems.

2. After completion
P's sol. will serve Notice of Transfer etc. F/r can refuse to accept this if there is an outstanding and unreolsved breach of covenant.