Ground Rent Arrears

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Ground Rent Arrears

Valuable income stream

Ground rent is a valuable income stream for freeholders, especially now in the current climate. It is crucial that there is a constant review of risk and credit control issues. When ground rent arrears have been identified, it is imperative that you act quickly and seek full recovery of outstanding sums. Without adequate controls freeholders and management companies can find the arrears getting out of hand and beginning to impact their cash flow. This type of pressure can be avoided if the services of specialist solicitor agents are employed, ensuring recoveries are collected promptly.

SLC Solicitors is able to provide a fast and efficient collection of arrears of ground rents on a no recovery no fee basis with absolutely no upfront charges to our clients.

Complete the form below and one of our specialists will call you to discuss:

We have a clear and concise fee structure offering you piece of mind

We provide clear advice on the terms of the lease and your rights to claim costs from the Leaseholder. We make it as easy as possible for you to make an informed decision about the risks and benefits to you by explaining in detail any action that needs to be taken.
To make the referral process easy for you, we do not request funds on account.
We aim to recover the contractual costs or fixed costs from the Leaseholder minimising the strain of litigation on your cash flow.

Pre-litigation
We offer a fixed fee structure up to and including the claim and request for default judgement if required.
Litigated Disputes
We will provide you with a reasonable quotation for litigation once a defence is received. We review our costs regularly and we will keep you informed of any changes as the matter progresses.

Enforcement
We can enforce an Order through various means including forfeiture and possession proceedings.
You will have a dedicated account manager who will explain the recovery process to you in full, before any work is commenced and will keep you up to date throughout.

SLC Solicitors will provide;

  • A dedicated account manager acting as your single point of contact
  • Regular reporting issued at the frequency of your choosing
  • A free to outsource service for clients with no upfront costs
  • Quick and efficient recovery of Ground Rent arrears
  • Access to our full range of services across the Metamorph Group of Companies.

How to instruct us

The information we need to commence the recovery of arrears
Essentially very little information is needed to commence the recovery process.

If the residential unit or block is a new instruction to SLC we would request from you, or the Land Registry, a copy of a lease (or a proforma lease where the same lease applies across the relevant estate). This will enable us to discover whether we are able to act on a no recovery no fee basis and recover our fees from the leaseholder.

In addition to this we will require a schedule of the tenant’s indebtedness confirming the dates upon which the amounts owing fell due, the periods to which the demands relate and details of the leaseholder’s leasehold address, and where relevant, if the leaseholder is not resident at the leasehold address (for example, buy-to-let landlords), a further correspondence address.

The required information is summarised as follows:

  1. statement of arrears of ground rent, administration charges etc.
  2. leasehold address
  3. correspondence address if different from leasehold address
  4. copy lease (usually one per block)

Providing no dispute exists and the debt exceeds £350 or has been owing for more than 3 years we are able to commence the recovery process on a no recovery no fee basis. If the amount owed is £350 or less and under 3 years old we can still provide an exceptional commercial offering.

Who pays for our service?

Dependent upon the terms of the lease it is generally the case that we are able to recover our fees directly from the leaseholder. It is because of this that our clients are rarely required to pay any monies to us in respect of the instructions we carry out on their behalf.

It is commonplace within a modern lease to allow for late payment interest to be charged against any overdue rents.

Typically the interest we are able to recover due to late payment ranges from 4% above Bank of England base rate up to 12% fixed.

If the lease does allow for interest recovery we ensure that the late paying leaseholder is made aware of this and must pay interest to the date of settlement unless our client confirms otherwise. In relation to those cases where arrears have been outstanding for substantial periods of time the accrual of interest can be significant – and recoverable.

Charges

SLC Solicitors are able to offer a no recovery no fee option with absolutely no upfront charges to all our clients to minimise our clients’ exposure to legal costs subject to the following criteria being met:

  • the leasehold title is registered
  • the property is mortgaged to a financial institution such as a bank or building society
  • there is a forfeiture clause present in the lease
  • the lease allows for the recovery of professional legal fees
  • no genuine dispute exists
  • the amount owing exceeds £350 or is over 3 years overdue

It is usual for all these criteria to be met and when we do act on such a basis all fees are paid by the leaseholders thereby easing any demands on the freeholder or resident management companies to fund recovery actions commenced by solicitor agents.


A word of caution: Outsourcing landlord and tenant debt recovery related instructions to debt collection agencies is a practice that could create some foreseeable issues for a client when account is taken of the fact that it is only solicitors’ costs that are recoverable pursuant to the relevant cost recovery clauses held in the lease i.e. the contract between the landlord and tenant. Organisations who are not law firms do not fall under the definitions of regulated legal representatives.

Typical example of costs clause:

“To pay to the Landlord or the Management Company on an indemnity basis all costs charges and expenses including legal costs and disbursements which may be incurred by the Landlord in the enforcement of any of the Tenant’s covenants herein.”

The clause above refers to “legal costs”. Costs can only be claimed by a “legal representative” which is defined under Paragraph 2.3 of the Civil Procedure Rules as:

Barrister;
Solicitor;
Solicitor’s Employee;
*Manager of a body recognised under Section 9 of the Administration of Justice Act 1895; or
**A person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the conduct of Litigation.

*= a body which has been recognised by the Law Society as being suitable to undertake the provision of any solicitor services or other relevant legal services.

Dishbursements

SLC Solicitors are able to offer a no recovery no fee option with absolutely no upfront charges to all our clients to minimise our clients’ exposure to legal costs subject to the following criteria being met:

  • the leasehold title is registered
  • the property is mortgaged to a financial institution such as a bank or building society
  • there is a forfeiture clause present in the lease
  • the lease allows for the recovery of professional legal fees
  • no genuine dispute exists
  • the amount owing exceeds £350 or is over 3 years overdue

It is usual for all these criteria to be met and when we do act on such a basis all fees are paid by the leaseholders thereby easing any demands on the freeholder or resident management companies to fund recovery actions commenced by solicitor agents.


A word of caution: Outsourcing landlord and tenant debt recovery related instructions to debt collection agencies is a practice that could create some foreseeable issues for a client when account is taken of the fact that it is only solicitors’ costs that are recoverable pursuant to the relevant cost recovery clauses held in the lease i.e. the contract between the landlord and tenant. Organisations who are not law firms do not fall under the definitions of regulated legal representatives.

Typical example of costs clause:

“To pay to the Landlord or the Management Company on an indemnity basis all costs charges and expenses including legal costs and disbursements which may be incurred by the Landlord in the enforcement of any of the Tenant’s covenants herein.”

The clause above refers to “legal costs”. Costs can only be claimed by a “legal representative” which is defined under Paragraph 2.3 of the Civil Procedure Rules as:

Barrister;
Solicitor;
Solicitor’s Employee;
*Manager of a body recognised under Section 9 of the Administration of Justice Act 1895; or
**A person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the conduct of Litigation.

*= a body which has been recognised by the Law Society as being suitable to undertake the provision of any solicitor services or other relevant legal services.

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