Like a player of the board game Monopoly who gets the dice wrong and blurts “Rent!”, leasehold operator Pier Management – owned by Essex millionaires Nicholas and Peter Gould – and debt collector JB Leitch have messed up a demand for unpaid ground rent.
This means the £3,265 of fees that they piled on to the £600 ground rent debt are scrapped. Indeed, JB Leitch, which appears to be remunerated by the debtor rather than by its nominal employers (and who will enforce the legal fees via the lease), walks away with nothing.
It is an embarrassing mess-up for the Liverpool-based debt collector cum legal practice, which has often seen reductions in its fees when challenged.
Buy to let investor Richard Scott thought he was paying his £200pa ground rent in his service charges for his one-bedroom flat in Chelmsford and was aghast to discover that he had not been paying it at all for three years.
Like so many other leaseholders who contact LKP, he said he had never received a demand for ground rent at his address.
JB Leitch demanded the £600 along with £750 admin fees and £2,435 in legal and court fees, with a forfeiture hearing set for June.
Mr Scott contacted LKP, which advised him either to pay the whole sum and argue about the reasonableness of the fees afterwards in tribunal, or to haggle.
Here is an example of JB Leitch halving its legal bill:
And here is Justin Madders MP, himself a solicitor, claiming that JB Leitch loaded ground rent debt by 222%.
But LKP also cautioned Mr Scott to the fact that non-payment of ground rent for three years was a massive error for a leaseholder to make, and that courts would not be sympathetic to non-payment of rents in the lease which a leaseholder agreed to when purchasing the property with legal advice.
As so often in the past, we expected to hear no more of the case and that Mr Scott would pay up in whole or in part and that would be that.
Now we have received an update.
Mr Scott did, indeed, decide to haggle offering £1,800 against JB Leitch’s fees, and he claims that they counter-offered £3,000 (which presumably included the unpaid ground rent).
“I was literally about to pay this (as I didn’t want it to proceed to court) and thought at least we’d got £865 off, when I had a ‘what if’ moment, and spoke with my original conveyancing solicitors, just to check if they had sent any correspondence to the freeholder (Piers Management) …
“Lo and behold, 24 hours later they supplied me with the letter, and receipt, to Piers Management to inform them that all correspondence should be sent to our main address, not to the leasehold property. As you can imagine I was euphoric!”
“I can’t say that the last 5-6 weeks haven’t been immensely stressful, with more than a few sleepless nights, however, I’m quite sure you normally only receive desperate emails from individuals (in the same way I contacted you), so thought you may enjoy reading a positive outcome for once!”
Mr Scott had this advice for other leaseholders to avoid entanglement with JB Leitch:
“I would advise others to go back to their conveyancing solicitors – just in case! Never assume your freeholder (and JB Leitch) are actually correct as they make admin errors. Seek advice, be polite and stand your ground. From the emails I have received in the last 5 weeks they are outright bullies!
“The other side to this I suppose is, don’t be a wally and check you are paying your ground rent and not just the service charge – seek it out, don’t just assume if you’ve never owned a leasehold before!”
Owing to confusion over the correct address, it could be argued that the ground rent should be waived as well on the grounds that there is no certainty that a notification was ever sent.
Mr Scott is aggrieved that there is no hint of an apology for this mess-up from either company.
LKP has invited Pier Management and JB Leitch to comment on this case.