We moved in to our newly built house 10 years ago on a lease which obliged us to pay annual ground rent, although the recipient of this money was not specified.
We did not receive invoices and naively did not question this at first, as our road had not yet been adopted. We eventually received our first bill from a ground rent company, charging us a late payment fee and demanding nine years’ ground rent within seven days.
I disputed the debt, but didn’t get a response. Months later we received a letter informing us that the ground rent company had changed and renewing the demand for payment.
The firm has contacted our lender to see if the debt can be added to our mortgage (charging us £175 for the privilege) and, despite us once again asking for a payment arrangement we can afford (£70 a month), it is demanding £200 a month plus an admin fee and is threatening court action and further costs. I have no problem with paying ground rent I owe on a reasonable arrangement but feel we’ve been charged erroneously for other people’s admin mistakes. GH, Newcastle upon Tyne
These unpleasant companies are either ignorant of the law, or hoping that you are. Court action can’t be taken to recover rent more than six years after it becomes due, so that knocks three years off your alleged debt.
Then there is the matter of the Common & Leasehold Reform Act 2002 obliging freeholders to demand ground rent in a “prescribed form”.
“Even if the company was not out of time for pursuing a claim, it would not be due as it has not been properly demanded,” says solicitor Kerry Glanville of Pemberton Greenish LLP. “The company should have sent out demands requesting payment and, for the demands to be valid, they must set out certain required information including the name and address of the landlord, the amount of the rent due, the period to which it is attributable and the date on which it is payable.”
Since, in your case, the rent was not properly invoiced and the limitation period had, in any case, expired, you are not obliged to pay it or liable for any late-payment fines, interest or costs.
As for the threat to add the “debt” to your mortgage, that is probably a bluff. “A lender is only likely to add arrears of rent to a mortgage in order to avoid the lease being prematurely terminated,” Glanville says. “A court order will usually be required before this occurs and, in this case, there is no question of the company obtaining an order because it didn’t fulfil the legal requirements.”
If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.
