Property tribunal habitue freeholder Israel Moskovitz has failed to charge £30 every time he issues a ground rent demand, the Upper Tribunal has ruled.
The case was brought by leaseholder and RTM chair Philippe Stampfer, of east London, who was indignant about this “deplorable practice of fee skimming”. He raised the matter with LKP and Sir Peter Bottomley in April last year, and we put him in touch with barristers.
In the event, Rebecca Cattermole, of Tanfield Chambers, took on the case, squaring up against Mr Moskovitz’s favoured counsel Justin Bates, one of whose specialities for this client seems to be arguing against leaseholders’ right to manage companies.
Mr Stampfer and his neighbours pay £250pa ground rent in two installments.
But in 2017 Mr Moskovitz bought the freehold to the block, and in July 2019 decided to charge each leaseholder a £30 “ground rent collection fee”. This adds up to another £72 a year (including the VAT), which leaseholders would have to pay from taxed income.
Mr Moskovitz’s Avon Estates told the leaseholders:
“The £30 + VAT ‘surcharge’ is a ground rent collection fee that we have introduced this year.
“The lease is set out in a way that the landlord should receive ground rent net and not incur costs in the collection
“There is work involved in collection of Ground rents.”
The leaseholders applied to the FTT, and Mr Moskovitz won the argument, prompting the leaseholders to appeal.
Miss Cattermole and Mr Bates disagreeing about what exactly the FTT had decided formed the argument in the Upper Tribunal.
Judge Elizabeth Cooke made a few criticisms of the FTT’s handling of the case, and added:
“I take the view that the £30 + VAT was, exactly as the landlord said in correspondence, a charge for giving the s.166 notice [ie for the ground rent] … Accordingly I accept Miss Cattermole’s explanation of what the FTT decided, and I reject Mr Bates’ explanation.”
The full ruling is here
Thank you for your excellent coverage of leasehold developments in the UK Parliament. Like many I fully understand the concept of leasehold being replaced by commonhold in new buildings up and down the UK.. However, the area still rather opaque is what will be done about the those blocks already under the control of freeholders. Some going back many years. Is it likely the UK government will get a grip on this before the next election? Any advice greatly appreciated. Kind regards Malcolm Flanagan, Director RBNA Tunbridge Wells