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Oct, 2014

Wednesday

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  1. #1

    Default Section 146 Notice

    Hi

    I am new to this so I hope someone can provide a view on the issue below:

    I purchased a leasehold flat back in early 2010 and was made aware that there were service charge arrears. However, the banks solictors gave an assurance that no liability would not transfer to me.

    I was subsequeently sent demands for the arrears and eventaully the matter was referred to the LVT. Although I had attempted to pay what was due from the date of assignment but these were rejected.

    At the tribunal (following much research) I succesfully argued that I was not liable for arreas prior to the assignment of the lease to me. I found a number of references supporting this.

    The tribunal found that I was not liable to pay the arears as the lease was pre 1990 and it was agreed that payment of the outstanding amount for 2010 was payable (as I expected).

    Since receiving the determination I have been trying to contact the Freeholder and Managing Agent to arrange payment. They did not responded to any of my correspondance.
    Then about two weeks ago their solitor sent me a Section 146 Notice alleging that I had not paid the money agreed.
    I of course immediately wrote to them making them aware of my attempts to contact their client (I have proof of posting) and sent a cheque to the solicitor.

    He has now sent the cheque back but not provided any explanation.

    I am at loss to understand what the position of the Freeholder is and how to respond to the Section 146 Notice.
    I spoke to the Leasehold Advisory Service who said that the Notice was invalid and rather than incurr additional costs just write to the Freeholder.

    I would appraciate any vieww on the above.

    Thanks
    Warner

  2. #2
    Join Date
    Nov 2008
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    2,187

    Default

    Service Charges do stay with the property not the individual therefore its is possible to buy a property and be chased for arrears however this is normally sorted out at the buying stage, there have been cases where this hasnt been sorted and individuals have sued the solicitor involved.

    Anyway it appears that the arrears situation is sorted and you are only libale for the period since you live there.

    Firstly have you been sent a valid demand ? See Leaseholdanswers post (#3) here > http://www.landlordzone.co.uk/forums...-or-to-not-LVT for some important info., S47 & S48 are prob. quite important becuase I assume that that is the address that correspondence and payments are to be sent.

    I havnt heard of anyone returning service charge cheques before, returning Ground Rent ones is more common due to the fact that accepting them can be viewed acceptence of any breaches and also sometimes freeholders like to tack on huge admin charges.

    Perhaps your freeholder has his eye on forfeiting your property ?..this is hardly ever carried through to completetion, and in your case you have proof that you attempted payment, as the S146 Notice should of told you..it HAS to go before a Court or LVT for determination, at which surely he would lose, beyond that its hard to tell what he is playing at ?

    Has he surved valid demands ?(S47/S48 and 'Summary Of Rights' attached ?)...and have you made any form of admission ?

    Andy

  3. #3

    Default

    The demands prior to the LVT hearing were valid in their structure as far as I could determine but included all the charges that were outstanding ie the arrears.

    Since the LVT decision I have not recieved a demand for the specific amount agreed at the LVT, although I had written on many occasions. When I submitted the cheque I made it payable to the Managing agent since they hold the service fund.

    The following is the decision of the tribunal:

    1) The tribunal determined that the service charges for 2005 to 2010 were reasonable.

    2) The tribunal determined that pursuant to Section 81....... the service charges for the service charge year 2010 were £2,517 of which £1,511 was unpaid and was payable by the Respondant.

    3) The tribunal declined to determine that the unpaid service charges for the years 2005 to 2009 were payable by the Respondant.

    At the tribunal I stated that I was not in dispute of any service charges due since assignment of the lease to me and had all attempts to pay that amount rejected. So the figure mentioned for 2010 has never been in dispute.


    The Notice states that I am required to pay this amount £1,511 and ends with the statement
    "These breaches are remediable and you must remedy the breach within a reasonable period of time. You are also required to make reasonable compensation in money due to the landlord for breaches of the covenant. In default your landlord intends to foorfiet your lease"

    I suspect that the Freeholder and Solicitor have some kind of game plan.

    I also wonder if the the Notice is valid in respect of the tribunals findings and that I am trying to make the payment.

    Warner

  4. #4
    Join Date
    Nov 2008
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    Is the LVT decision online ?. (All decisions are published on LEASE and RPTS sites).

    Was the LVT case a determination that a breach had occurred (there was mention of S81 relating to Forfeitures) or did you make an admission that the money is owing ?. I ask because it sounds as if the freeholder believes this to be the case, that you have breached a covenant of the lease and that a S146 Notice can be served (without the need for a determination).

    Of course if you have been trying to pay then the above is rather irrelevnat because then the breach has only occurred because of their refusal to accept payment,.

    Andy

  5. #5
    Join Date
    Dec 2010
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    874

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    I'm going to guess that this probably has something to do with costs, either of the LVT or in preparing the notice. Everyone seems to have differing opinions over what constitutes waiver and for this reason many landlords (and sometimes their solicitors!) refuse to either communicate or accept any payment other than the full amount they want.

    What, if anything, has been said about the costs of the LVT or the solicitors fee for the s146 notice? I'd be surprised if they don't want paying for one or the other (even if they're not entitled).

    You said:
    Since receiving the determination I have been trying to contact the Freeholder and Managing Agent to arrange payment. They did not responded to any of my correspondance.
    Did you try just sending them a cheque at that point?

  6. #6

    Default

    The decision is online ref CAM/22UN/LSC/2011/10046.

    I do not believe the determination was that a breach occured, however I am also thinking that they have an intepretation of the wording relating my agreement of the charges due for 2010.

    At the hearing I submitted evidence that I had attempted on several occasions to make payment for service charges due since assignment and therefore agreed that amount for 2010.

    Hence as soon as I received the determintaion is wrote on 4 occassions to the Manageing Agent (who reprseneted the Freeholder)in order to arrange payment but requested a formal statement. It was only when I actually sent a cheque that I recieved as response ie a Section 146 Notice.

    For further background, prior to the LVT hearing they had infact served me with a County Court Notice and prepared a barrister etc and so incurred costs. At the CC I argued that the case should be heared by the LVT and hence it was transferred to them. No costs have been granted to either party at the CC or the LVT.

    I wonder then if the statement " You are also required to make reasonable compensation in money due to the landlord for breaches of the covenant" have some bearing on their intentions.


    Warner

  7. #7
    Join Date
    Dec 2010
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    874

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    I can't find that decision on their website, do you have a link?

    The problem is you seem to have encompassed two quite complicated areas of law in your case. Firstly, the service charges prior to your purchase cannot be recovered from you as debt - but common thinking seems to be that non payment is an ongoing breach - which is why as Andy says, the service charge arrears tend to run with the property. Secondly, very recently the Court of Appeal decided that the costs of LVT proceedings can, if the relevant clause in the lease is wide enough, be recovered as costs incidental to the preparation of s146 notices. The reasoning of the tribunal may throw some light on whether or not that is the line they are taking.

    Also, since this was started in the County Court it will be referred back. They may be (probably are) intending to continue those proceedings and have the costs dealt with there since the tribunal cannot award costs other than in exceptional circumstances.

  8. #8
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    Aha..its becoming clearer, I was under the impression that the LVT case was about them payability and/or reasonableness of service charges BUT it is actually a determintaion for breach of the lease, on two counts..the lack of notice of assignment and then service charge arrears.

    However it is rather confusing to say the least !...it is not really clear whether there was a breach for the non payment of service charges 2005-2009but it would appear that that can be ignored and its only the 2010-2011 that you are liable for.

    Dose anyone else care to have a look > http://www.residential-property.judi...1_17_19_03.htm its not very clear whether the LVT does actually conclude that a breach has occurred !?

    To summarize it would appear for a breach to have ocurred then the arrears must have been owing for a reasonable time, upon what date did you receive any demands and for how much ?...and on what date did you receive the LVT decision and on what date did you (try) to pay the arrears (£1511).

    Ultimately I guess that the management comopany wants the £1511 amount AND some compensation for your breach but the decision could be clearer !

    Andy

  9. #9
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    Quote Originally Posted by Tulula View Post
    I can't find that decision on their website, do you have a link?

    The problem is you seem to have encompassed two quite complicated areas of law in your case. Firstly, the service charges prior to your purchase cannot be recovered from you as debt - but common thinking seems to be that non payment is an ongoing breach - which is why as Andy says, the service charge arrears tend to run with the property. Secondly, very recently the Court of Appeal decided that the costs of LVT proceedings can, if the relevant clause in the lease is wide enough, be recovered as costs incidental to the preparation of s146 notices. The reasoning of the tribunal may throw some light on whether or not that is the line they are taking.

    Also, since this was started in the County Court it will be referred back. They may be (probably are) intending to continue those proceedings and have the costs dealt with there since the tribunal cannot award costs other than in exceptional circumstances.
    There is a typo in it..but Ive linked it above...and yes I agree surely this should now go back to the CC to tidy it up a bit as its rather messy.

  10. #10
    Join Date
    Nov 2008
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    Ok .. Ive re-read it and some of my above comments were wrong.

    The LVT application is BOTH to determine whether as breach had occured (they 'refused' this so the answer is neither yes nor no !), AND to determine reasonablness (they concluded yes although strangely there seems no investigation of costs/amounts).

    So initially I'd say they can't serve a S146 because there has been no determination BUT does Paragrpah 18-19 mean an agreement or admittance has taken place ?. (its rather sneaky if so, but I had a similar scenario, I was served a s146 then nothing then later the freeholder refered to a court claim where I admitted the money was owing..I was niave and foolish at the time, it appear you may have fallen into the same trap).

    Andy

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