To think it's wrong that a flat can be confiscated without compensation

[DisconcertedAndRetired]

If you "own" a flat in England it will be leasehold. The lease will have various obligations, such as you have to pay the ground rent and management charges, not cause a nuisance, maintain certain things, etc. Apparently if you do not comply with the terms of the lease, the lease can be cancelled. That's your property gone, forever, possible hundreds of thousand of pounds down the toilet, no compensation.

In the case I'm about to link to, apparently a lady didn't pay £600 in ground rent, and lost a £100,000 flat.

www.bailii.org/ew/cases/EWHC/QB/2013/2304.html

(I haven't read the details myself, I'm going by a summary elsewhere as to what happened.)

I would have thought that if a lease is cancelled and a flat sold off, that any money left over after any actual debt and legal costs are paid should be returned to the former owner. But apparently that's not the case.

Among other things, the lease on my flat says no pets allowed, no laundry to be visible through the windows. So if the freeholder notices a goldfish in a bowl when they look through the window, or a sock hanging on an air-dryer, does that mean several hundred thousand pounds down the drain, and a nice profit for them?

I don't have in issue with leases being cancelled, as a last resort, my issue is purely that the freeholder should not get any reward other than money owed and legal costs recovered, and an undesirable lease-holder evicted.

The lady in that case claimed that she didn't know about the court proceedings till after her flat had been taken off her. She lived elsewhere so didn't get notice that was served. I don't care about the truth or otherwise of any of that: the bottom line is that the best part of £100,000 should have been returned to her, whatever (if anything) she did wrong. But the law does not require that.

Micah that's very unlikely. There will have been a lease. "Share of freehold" is not a form of tenure. You probably never worried about the lease knowing that there was no ground rent to pay.

This thread is right on time. I own the freehold to a block of four flats, one of the leaseholders is a btl landlord who doesn't pay any ground rent or insurance. I have tried many many times to get him to pay but he ignores all communication, this has been going on for a few years. I have been swallowing the shortfall. I have held off legal action because I always felt taking his flat off him is a bit excessive, I have threatened to in letters though all of which have been ignored. Fuck him though, I'm going to start proceedings see if that gets him to pay up.

I think Disconcerted has fundamentally misunderstood the concept of leasehold. A lease is not ownership it's a loan and therefore anything paid upfront is forfeit if the terms of the loan are broken. Surely this is not complicated? If you don't want to risk it, just rent instead.

I never understood our lease when we owned a flat. We lived in a purpose-built maisonette in SW London. It wasn't a conversion - it had been built like that in 1906. Our freeholder was a very old lady who lived on the outskirts of London and we paid her £35 a year ground rent. She wanted us to buy the freehold but it was thousands and thousands of pounds - like about £15k I think and we never had that money (obviously!).

We didn't do any work to that flat but I think if we'd done something like replace the windows or knock down a wall, we'd have had to tell her.

My brother's just bought a share of the freehold of his flat - he lives in a huge converted house which has four flats in it. He's bought the freehold with one other owner. It has taken - no exaggeration - well over a year to sort out and an eye-watering amount of money.

I understand maintenance charges if you live in a block with communal areas but otherwise it baffles me.

There are many, many legal steps involved before you can lose your flat for non-payment of the ground rent. It's a long and drawn out process and the vast majority of professional freeholders (generally pension funds & insurers) would not enter into it lightly for reputational reasons. If you are a mortgagee, the bank will generally step in and pay it before your flat is repossessed.

There are lots of things that leasehold should be reformed for: leaseholder repairs and CPO for estate regeneration being the main things, but I can't feel sorry for someone who refused to pay regular ground rent charges.

Didn't what's his name, Nickolas Van Hockstarden (?) Get rich by owning lots of freeholds and then imposing conditions that where neatly impossible for the leaseholders to meet and having to loose their flats to him? I think the law was changed perhaps because of him to make it harder for freeholders to take leaseholders flats from them.

Going against the grain of this thread actually I agree with you op. If you don't pay your gas bill they can only recover the money owed plus costs, they can't take your house off you and keep it.

I'm very very interested to hear OP's answer to the "who do you think your landlord is" question . Ooopsy.

My issue on this is that when a company/person takes another to court over a financial type matter. There is no way in really proving that the person being sued has received the notification that they are being taken to court on a certain date. The person suing can tell the court that they have sent a letter notifying them of the action on a certain date and the court deem that the person has received the notification 3 days later. No proof has to be given as to if or when the letter was sent.

I had an instance whereby I received a judgement against me after the case had been taken to court. I had no idea anything was happening and as far as I was concerned I had paid and had the letter thanking me for my payment. I did get the judgement reversed but only after paying the full amount, including their solicitors fees into the court then reclaiming the original amount. I had to pay court costs, and solicitors fees even though I had done everything correctly as it was deemed I should have told them I had paid before it got to court. In total it cost me £140

The fundamental point is that when you hold a property leasehold and there is a separate freeholder, you don't own the place in the sense that some on this thread seem to think. A leaseholder who thinks they above the law and doesn't fulfil their obligations deserves all they get.

Micah with a share of threshold flat you own a share of the company the company owns the Freehold my 'freehold' flat has a 500 year lease owned by the company I own 1/3 of. If the other two flats didn't pay their charges (decided and set by the three of us) then technically we could revoke their lease. If you paid ground rent/service charges this was you too.

Nick van whatisname made money buying property with sitting tenants (in the old days of limited rent increases) very cheaply, then bullying(in the nastiest ways) the tenants to leave, upping the rents, and making them more valuable.
The court's do not take action lightly in these cases. If the punishment was only the lost costs/service charge, lots of people would not pay and common areas/services could not be delivered.

Andorover, that is why the concept of Commonholding was introduced. It was not available when we owned a flat, so we had to leap through a few more hoops, however, it is possible to be both leaseholder and to have control of the freehold. We grabbed ours in order to extend the lease term to 999 years. I am not sure if the current owners bothered to complete the paperwork, they will be in a pickle soon if they don't as the lease will soon have less than 50 years remaining.

The problem occurs when the freeholder wants to have his cake and eat it. Say, a developer sells the flats and then wants an exorbitant ground rent, maybe linked to a high service charge. There are some restrictions but there should be more 'right to buy' of the freehold, to protect the leaseholders.

This pertains to Scotland, but surely there are similar bodies in England:

Re ensuring the person has received the notification - we have Sherriff Officers and Messengers at Arms for such deliveries:
en.wikipedia.org/wiki/Messenger-at-arms

There are, bailiffs, county/high court sheriffs... all need to notify in person.

Until it gets to the high court, those sheriffs just need a writ, the person it is being served on won't get notice. As can be seen on various telly programmes at the moment!

I've owned two leasehold flats and have always seen the charges as just part of my mortgage. If I didn't pay those I would have been repossessed.

It is hard to say because your link refers to the lessee's appeal.It says that the judge in the original case considered the question of proportionality.So I am guessing there must have been some compelling reasons

That's it Bubbles. They form part of your contract of sale and so really are, effectively, part of your mortgage, if you have one. Another man in our block couldn't pay, he lost his job and had other debts.

Eventually, when he was repossessed the bank paid his arrears so that they would have the flat back, free and clear of any encumbrance.

I can't believe people think it's OK. Yes, fine, if contract broken then take possession of the flat. But the money that is made when flat is sold again should go to the prev owner. Otherwise owner of property is getting double the money for on property

It's obviously a legal issue but think those laws are v unfair if people can lose hundreds of thousands of pounds over a few hundred pound bill. The law seems exploitative

I had the threat of this once with a flat I owned, apparently my tenants were causing a noise nuisance by having too many visitors, often arriving late at night etc, smoking outside the main entrance in groups, being too noisy outside other people's windows etc. I never got to the bottom of whether they were being noisy in an anti social way, or just the sheer frequency with which they were there in any number was irritating the owner occupiers, who disliked the fact that they were there at all.

The tenants assured me they never had more than half a dozen or so people in the flat at once but I guess if you have that many visitors frequently it would seem like a constant stream of annoying people trooping in and out, especially when they are coming and going through a communal entrance, laughing loudly, swearing or whatever. But the flat had three young sharers who all had different friends coming and going.

I sorted it out and read the tenants the riot act and one moved on out of choice, the others got their act together and toned it down. But it did make me wonder how easily my asset could be taken from me without any proof of easily defined wrongdoing, just the word of a handful of disgruntled owner occupiers who object to having livelier, younger, more transient tenants in the midst of their formerly quiet and naice block of flats.

I was told by the management company that the council would be monitoring noise due to complaints from neighbors but the council never even wrote to the address in the end, so whatever they were monitoring can't have been that bad.

It made me realize that what constitutes a 'nuisance' or anti social behavior can be quite a loose thing to define and if the other leaseholders take against frequent visitors who are a little too visible or noisy as they come and go, even if they aren't exactly holding huge wild parties, you have a problem.

One of the complaints was that a drunk young man was banging on the door in the middle of the night and being loud because he wanted to see one of the girls and she wasn't even there! There was no lock or intercom on the communal entrance door so it's quite scary to think that I could stand to lose my flat because of some drunken idiot wanting to speak to my tenant at 3am. It wasn't her fault OR mine!

There is, in the link the OP gave, a legal argument for just that. Right down at the bottom, it explains why it was not, at the time, taken into account. I assume that if the woman concerned wants to put the correct paperwork in, she can... it is clearly identified in the judgement, which I read, top to bottom!

That the woman concerned chose to buy a flat and then not pay any part of the concomitant fees started the problem. Had she engaged with the legal process properly she would have had a different experience.

That she has lost all of that money is not yet cut and dried. There are laws in place. Had the woman in this case used them correctly she may not be out of pocket. But as she has not placed the correct paperwork in front of a judge there is nothing the law can do to redress the balance.

This is her problem, one of her own making. If she wants her money back she needs to do things properly.

What is exploitative in that?

um, what is the summary please? why didn't she just pay the £600 and settle?

Absolutely my flat is a Freehold flat and had absolutely no problem at all getting a mortgage. Why would there be a mortgage problem with a freehold flat?

The annual charge pays for sorting out gutters windows roof gardens lifts stairs door security etc. if you live in a flat and some people won't pay the flats get run down very quickly or you are paying for a parasitic person. If you don't want to pay you don't sign the lease and look elsewhere

She bought the flat in 2006, made no payments and was taken to court in 2011. She did not turn up at the court and only challenged the desicsion 9 months after the fact - she said she had no idea it was happening as the post was to the flat, not her address in Northern Ireland. The court held the landlord was correct to send post to the flat and she failed to attend or challenge, therefore lost the property.