Six leaseholders in Bristol have been charged – and have paid – £785.82 in lost interest for ground rent that was not charged for five years owing to “an oversight” by Malcolm Warner’s Pediment Properties Limited.
Landlords have the right to claim back unpaid ground rent going back six years, but they cannot add interest payments to the sums left unpaid owing to their own carelessness.
Five of the six leaseholders at St John’s Court in central Bristol paid up the demands for interest, but Verity Hobbs paid the outstanding ground rent only and disputed the demand for interest.
As a result of emails from Mr Warner threatening forfeiture, and to contact her mortgage lender, Miss Hobbs subsequently did pay the £130.97 demanded, but she also contacted Thangham Debbonaire, Labour MP for Bristol West, and the Leasehold Knowledge Partnership.
On 23 March, LKP wrote to Malcolm Digby Warner, and his fellow director at Pediment Properties Limited, Ruth Archer, suggesting that they repay the £785.82 of interest added to the ground rent bill to the leaseholders at St John’s Court.
There has been no response.
In correspondence to Miss Hobbs of 22 July 2022 Mr Warner acknowledged that he had failed to serve ground rent demands on the leaseholders since 25 March 2018. It was “an oversight”, he explained.
He requested payment of £1,125 for unpaid ground rent, although perhaps not quite in the prescribed form under the Landlord and Tenant (Notice of Rent)(England) Regulations 2004. Mr Warner’s correspondence introduced additional terms and requested payment of the ground rent within 28 days (as opposed to the minimum 30 days in the regulations above).
More important, Mr Warner calculated interest, amounting to £130.97 in the case of Miss Hobbs, dating back to 25 March 2018: the date when Pediment Properties first failed to send out the correct ground rent demands.
Miss Hobbs claims, and Mr Warner’s correspondence appears to confirm, that he issued the same requests to the other five leaseholders at St John’s Court which, if the leases are the same, would amount to a total for the six leaseholders of £6,750 in unpaid ground rent and £785.82 in interest.
Mr Warner threatened to contact Miss Hobb’s mortgage lender in a letter of 1 September 2022 after she paid the outstanding ground rent, but withheld payment for £130.97 interest.
Mr Warner wrote:
“One remedy for such a failure is for the landlord to re-enter the flat and forfeit the lease you hold under Clause 7 thereof. If we do not receive payment by 4pm on 14th September 2022 we shall feel constrained to instruct our solicitors to take such steps as they suggest to recover the monies and/or possession by forfeiture.”
On 18 October 2022 Mr Warner wrote to Miss Hobbs again demanding the £130.97 interest; all the other leaseholders having paid the interest in full:
Mr Warner added:
“Although we do not normally levy an administration charge we are re-considering this in your case given the trouble you are putting us to in dealing with you as a tenant.”
A landlord cannot serve a section 146 forfeiture notice unless the service charges, administration charges or ground rent outstanding is more than £350, or is made up of, or includes, an amount that has been outstanding for more than three years.
Miss Hobbs replied to Mr Warner’s demands on 18 October 2022:
“I am devastated that you have described me as causing you trouble as a tenant. This is absolutely not the case, in fact, you are causing me as a home owner struggling already with the current climate, a horrendous amount of stress and trouble.
“To be clear, I am not withholding rent. I have paid the rent. Due to a mistake your end,you did not charge me ground rent for 5 years. I received no invoices or invoice details from yourself. I am paying over £2k a year for service charges for a small building which receives next to no management. I assumed ground rent was included in this as the rates are high …
“You charged me £1,125 which covers 5 years worth of ground rent. You sent this to us in the current climate. The money clearly means nothing to you if you can afford to forget to charge 6 tenants for 5 years. Regardless, I have paid this. You have also charged me £130.97 in interest which I should never have had to pay if it wasn’t for your mistake. This is completely cruel. You are now threatening my lease over £130.97 which I never owed. How you can have absolutely no compassion is distressing to me.”
If either Mr Warner or Pediment Properties wishes to comment on this article, they are welcome to do so.
Yet another shinning example of why the “Freehold – Leasehold racket” needs to be abolished at the earliest opportunity, and be replaced with Commonhold.
We all make mistakes from time to time but we should not expect others to pay for them, it is called being responsible for your own actions. And If it were not for Leaseholder Knowledge Partnership and others, that kind of Leaseholder action and behaviour would not get the attention it richly deserves.
Typo – it should read ” Freeholder action” and not leaseholder action.
I prove my point we all make typo mistakes and put them right
Check the lease. Mine states even if invoices aren’t sent, that I still must pay. My lease also states that interest is payable on outstanding payments, demanded or not.
Thank you for your legalistic contribution. In any case the article states, “Landlords have the right to claim back unpaid ground rent going back six years, but they cannot add interest payments to the sums left unpaid owing to their own carelessness.” I suspect that this would override what is stipulated in any (your) lease.
Unfortunately leases aren’t sensitive to victims. Sign the contract, fulfill your obligations.
I share your distaste for the outdated freehold system rather than common hold. However, as a member of a RTM, I am not sure Commonhold is the ‘silver bullet’. There are 105 properties in my apartment block. Around 6 to 8 regulars attend meetings and serve as RTM directors. It is apparent they are in the pocket of “their” appointed managing agent. The service is apalling and expensive.. However 85% of the apartments are rented out. In the past when I had access to the leaseholder Register I managed to increase participation in the meetings and the election of the RTM directors to 42% of leaseholders. But now I have been (for years) refused access to the leasehold register along with other illegal acts designed to stop me removing the current RTM directors (and then their agent). I am a busy person in ill health . Solicitors I have consulted have been vague and non committal but warned of legal costs. Maybe top solicitors would be better but I can’t afford the cost. As such, Comonhold/RTM may be far from perfect for many leaseholders..