advice on an unexpected debt please (leasehold, repossession!)

[KatherineKrupnik]

Waiting for the CAB phone line to open at 10!

Bought a house in 2011, nearly 2 years ago actually. It was a repossession. We were aware that it is leasehold & ground rent was £4 a year. I assumed that we would receive a bill for it as & when, didn't really think anything of the fact we hadn't received one yet.

Have just got a letter billing us for £1090.18, for ground rent & administration fees from 2007.

Apparently our solicitor failed to get in touch with them when we bought the house, so they have been writing to the bank since then. They did a Land Registry request (£48) two years ago when they will have discovered we were the owners, but still haven't been in touch with us before now.

I want to write back, paying the ground rent we owe - which is £8. Given they haven't contacted us before I don't see why I should pay administration fees etc. Since our solicitor apparently missed something it seems fair to pay the land registry feeds too.

Is that likely to wash? I don't want to end up in court/with a black mark against my credit rating...

a land registry search costs 4 pounds.....

You're not liable for any rents due before you bought the place 2 years ago, but they want rent from 2007?

Contact the solicitor you used for the conveyancing. They should be the ones sorting it out. You paid for conveyancing services, which this is.

Am going to call the solicitors during nap time, also dig out our paperwork. The letter isn't from the people I remember being the leaseholders.

I assume repossession was taken by the bank in their role as the mortgage lender?

In repossession cases, solicitors acting for the mortgage lender have to make contact with any parties with a legal charge on the property, to settle any debts using the proceeds of the sale. I'm going to guess that the freeholder, who sounds like they or their agents don't really know what they're doing, had failed to demand ground rent in a timely manner and they've only just realised these funds are due.

But the mortgage lender and your conveyancer have ballsed this up between them. Conveyancers are well aware that ground rent can be backdated and demanded for up to three years and your conveyancer should have checked that ground rent was up to date and if not, arranged for some funds to be paid over as part of the completion monies, to stay on account until the ground rent was demanded.

Your conveyancer needs to sort this out for you. What should probably happen, is that the bank/mortgage lender and your conveyancer will need to liaise with the freeholder to get the ground rent for the 2007-2011 period settled, either direct to the freeholder or via your conveyancer. I bet the freeholder hasn't served a proper notice/demand for these on the mortgage lender either, but that's for them to sort out.

If they haven't already done so (I suspect not, conveyancers are notorious for not dealing with this properly), your conveyancer needs to serve a Notice of Transfer/Assignment on the freeholder. The freeholder shouldn't accept the notice of transfer before the 2007-2011 ground rent is paid (see above) and if they do, they are prejudicing their right to recover this element of the ground rent from you. Then, the freeholder will need to accept the notice of transfer and serve you with an up to date demand for the ground rent due from 2011 onwards.

The freeholder is legally obliged to serve you with a notice that the ground rent is due. This has to take a prescribed form, i.e. they can't just write and say 'you owe us £4'. This is the information that the demand has to contain. The law on demanding ground rent is very specific and the funds aren't due until this has been complied with.

As they haven't served you with this demand, they can whistle for their administration fees (also worth checking your lease to see if they are allowed to charge administration/legal fees in any event; not always the case).

Sorry this is so long!

thank you very much MrsBert! That is really useful. I am just waiting for our solicitor to call me back now.

It sounds like this is your area? Do you think I will end up paying only what I owe - i.e. £8? We just bought a car, we really don't have anything extra right now to pay all this.

You should absolutely pay ONLY the ground rent due for the period from the date your sale completed (and technically, you don't owe anything yet, because the freeholder hasn't served a proper demand on you).

Worst case scenario, your conveyancer and the mortgage lender agreed that sums for the ground rent for 2007-2011 would be paid as part of completion funds and your conveyancer didn't contact the freeholder to discuss payment of these. If that's the case, you still go back to the default position, being that the freeholder hasn't served you with a demand.

I'd be interested to see what your conveyancer says about their role in all of this.

Yes, I am well versed in leasehold law and hassling conveyancers, lucky old me.

Thank you, MrsBert, I might be PMing you one of these days!

My conveyancing solicitor's secretary has called me back - they are getting the file out of storage & will call me back in a day or two...

Feel free to PM. Would be interested to know who your freeholder is / the company who've contacted you for the funds, in case it's someone I know!