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Stuart J
Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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Matt, I'm having problems with a firm called Simarc

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Hi Matt,
I'm having problems with a firm called Simarc who collect ground rent on our PPR (owned with mortgage).
£10 annual ground rent wasn't paid by oversight and have now received a demand for the original amount plus £60 'administration fees' pertaining to the non payment.
Surely they can't levy a charge which is 5 times (£60 inc VAT) rthe outstanding amount?
Thank you for the question. It is my pleasure to help you with this today. Please bear with me if I ask for more information.
it appears that Matthew is off-line at present because you have been waiting for some time in respect of this.
I will try to help you.
Is your query here simply with regard to the penalty?
What does your lease say about them recovering the costs of collection?
Have you now paid the £10?
For the future and to avoid this again (I will tell you how to deal with it when you come back to me on the lease issue) as it’s such a small amount and easily forgotten, why don’t you simply pay the next (for example) 10 years in advance?
Customer: replied 2 years ago.
Yes my question was in respect of the penalty charge only.
I'm unsure of the terms of the lease as the company who collect the ground rent try to charge £320 to view it.
As regards ***** ***** the £10 this isn't an option as online you cannot pay just the rent, it has to be the rent and the charge, the page is set up that way. Online forums are full of people who've tried to pay just the rent by sending a cheque but the company refuse to cash the cheque.
If the company refuse to cash the cheque and they take you to court, they would lose certainly on the service charge issue.
I wasn’t so much thinking of a cheque in respect of what they are asking for now, I was thinking of a cheque in respect of the next 10 years or so ground rent to avoid this problem happening again
However it is essential that you check the lease to see whether they are allowed to charge 60 quid.
You can get a copy from the land registry for 20 quid.
Assuming they are allowed to make a reasonable charge for enforcing the terms of the lease which would be quite normal, then 60 quid is quite reasonable.
What makes it appear unreasonable is the fact that they are not collecting the ground rent of £1000 but only a ground rent of £10.
There is an issue of proportionality which you could argue with this ever went to court that the cost of collecting the rent is completely disproportionate to the amount of rent and that would be for the court to decide. However that would be a matter for the land tribunal and to take this to tribunal could easily cost you 10 grand in legal costs if the charge was indeed found to be reasonable and costs were awarded against you..
There is another issue here and that is that the management company have to give consent to any transfer of the property or any mortgage so that you come to sell or remortgage, even if you pay the rent but not the charge, they will simply refuse to give the consent to any transfer until you have paid.
What they have done here is probably made the charge about as much as they could get away with to make it not worth arguing over.
There is another issue which you haven’t mentioned here and that is that it appears they didn’t actually demand the ground rent from you although they may have done. In fact, there is a liability on you to pay the ground rent whether it has been demanded or not so the fact that they may not have asked for it doesn’t actually assist you.
I’m sorry, I appreciate this is not mostly the answer you wanted but nonetheless, does it answer the question? Can I answer any specific points arising from this?
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