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View Full Version : Lessee does not pay service charge- what can I do?



Golf Gti
14-12-2008, 22:29 PM
Hi im new here but looking at some of the old threads i think ive found the right place.
I run my flats maintenance company and have done so for a few years now.
It it a share of freehold property with the six flats each holding a share in the company which is the leaseholder.
It has been a difficult to run as it was dumped on me after many years of bad practice with a balance of £200! and expired buildings insurance.
I have since recovered most of the unpaid maintenance money and raised the Monthly fees to cover all the usual increasing bills.
But!
All five owner occupied flats are currently paying their "rent" Except for the owner of one flat who has been letting it since he purchased it in 2003.
He has not paid since 04/07 when i forced him to after refusal to cooperate on a remortgage and he had to clear two years of back rent.
He will not pay his money at all ive tried to be nice but it has not worked.
He owns several coversions on my Road which are run down so obviously does not care about repairs etc.
I am having to fund fire regulation work to company areas ie Hall and stairs which could be paid for in one hit if i could get him to pay his debt.

I have written to his Mortgage company expaining i intend to take legal action etc
Also i have obtained his deeds to locate an address which showed him in residence, which is not the case.
What steps should i take next? we want this put right and to stay right
All the other shareholders are with me as we want to keep our homes protected which is why the company was set up.

Sorry for the long read but any help would be welcome

jeffrey
15-12-2008, 10:56 AM
1. The Company (C) probably owns the freehold reversion.
2. If so, it is not the leaseholder- each flat owner owns a leasehold interest in the flat concerned.
3. The lessees also collectively own C.
4. Keep clear the distinction between ground rent and service charge. There are different rules applicable.
5. The defaulting lessee is in breach of his lease's covenants. C, acting by you, should begin enforcement proceedings.
6. Take care of s.167 and s.170 of Commonhold and Leasehold Reform Act 2002. The former bars suing for unpaid renr less than £350 or owing for less than three years; the latter bars suing for service charge (amending s.81 of Housing Act 1996 on that subject) unless there is an admission by T- or a Court Order- that the service charge is indeed payable.

Golf Gti
15-12-2008, 22:10 PM
You are correct in your description of the company, the company is the shareholders and not a seperate entity.
The Person in question has agreed upon purchase to pay the monthly "Service charge" for the upkeep of the building
and services to the building, including Buildings insurance and any other expenses incurred.
Details for a standing order/Direct Debit were supplied but never acted upon.
We have no Ground rent only the Maint charge.
I will have a read of the CLRA and see what i can fathom out, Watch this space
How do i go about a court order with out his address?
I may ask the other shareholders and see if we are willing to spend the "owed" money on proper legal representation
To make this stick.
What would be the average cost to deal with a matter like this?
Many thanks for all your help:)

jeffrey
16-12-2008, 08:48 AM
I will have a read of the CLRA and see what i can fathom out, Watch this space
How do i go about a court order with out his address?
I may ask the other shareholders and see if we are willing to spend the "owed" money on proper legal representation
Remember that:
a. T's address as lessee for service is his last known address (and, to be on safe side, also at the flat); and
b. in suing T, C can include a claim for its legal fees. If C wins, this will presumably lead to Court ordering T to pay C ['indemnify against'] all litigation costs necessitated merely because T defaulted. Other lessees should not have to pay anything towards those costs, in that event.