Freeholders of small block of flats - dealing with delinquent leaseholder.

[maggiethecat]

Does anyone own a flat as part of a block of flats for which they also own the freehold?
I own one of three flats (converted house) for which all three owners bought the freehold 10 years ago. We don't use a managing agent since the property is low maintenance and we have always split the responsibilities between myself and another owner. The third, non resident owner has always been delinquent in paying the annual maintenance fee (insurance, electricity, companies house fees etc) and it is always a struggle to get his payment. A few years ago I sent him a letter before action and he promptly paid up.

I'm getting fed up with this annual ritual - lease does not make any real provision for this situation and I'm wondering what's a good way to deal with him to end this nonsense?

[JazzAnnNonMouse]

Speak to a solicitor?

[Jaynebxl]

Buy him out?

[maggiethecat]

Jazz, I could do but I think the legal solutions will lie in varying the lease probably to make non payment more punitive. It may be the route to go.

Was thinking more along the lines of non-legal at the moment.

Cannot afford to buy him out Jayne.

[RunningOutOfIdeas]

Does the delinquent owner have a mortgage on the property? Slightly different situation but I used to own a leasehold flat and was also on the board of the company that managed the flats. There was one owner who always had to be chased for fees. In the end the bank with the mortgage was contacted and told he was building up arrears on the property. The bank agreed to pay the outstanding fees and add them to his mortgage. The next year this idiot still did not pay on time, bank approached again, they paid and then repossessed the flat. I think he was also behind on his mortgage payments and we also had bailiffs round chasing gas bills.

[GrandPoohBah]

When I'm not on maternity leave, I'm a managing agent, and our debt collectors do approach the mortgage company if there is one. It's easy to find out - get the details of the flat from land registry, it will show if there's a charge on it which is the mortgage company. Let them know that there are arrears; if a leaseholder racks up too much debt then the freeholder can apply for a section 146 judgement - forfeiture of lease, which clearly the bank doesn't want as they'll lose their asset!

Some mortgage companies want a court judgement before they pay up - you can apply as the 'freeholder' and the court will almost certainly rule in your favour as there's very little wriggle room within a lease, particularly as most service charges are payable in advance. If the leaseholder does defend themselves at court it will immediately be turned over to the Leasehold Valuation Tribunal for arbitration who are very good at dealing with 'layperson' disputes.

Hope that helps a bit!

[maggiethecat]

contacting the lender is probably a good idea. i know he'll pay up but he just takes the piss every year.

[Shlurpbop]

Marking my spot - this is just the kind of info I was looking for! Also have a non paying lease holder :)

[maggiethecat]

good that you can smile!