Pay or the court will take it away!
Few in the industry will have missed the recent news coverage concerning the forfeiture of a £600,000 London flat over £216.62 in outstanding service charge and unauthorised works.
Mr McCadden purchased a leasehold flat in 2016. His relationship with the freeholder (who occupied the flat below) soon broke down over service charges. The Tribunal ordered Mr. McCadden to pay £216.62 in outstanding service charges, and found that refurbishment work had been undertaken without the necessary consent from the landlord.
Mr. McCadden refused to pay the service charge, or to reverse (or pay compensation) the refurbishment works he had undertaken. A forfeiture order (6 August 2018) and then possession order (22 August 2018) were made by the County Court sitting at Willesden, transferring the leasehold flat back into the landlord’s name.
Sebastian O’Kelly, of the charity Leasehold Knowledge Partnership (LKP), told The Times: “Mr McCadden has been found to be an inconsiderate neighbour and a leaseholder with no understanding of his obligations”.
For landlords and property agents at the end of their tether with leaseholders who breach their lease and simply won’t engage, it may be worth pointing out this case.
On the other hand, despite Mr McCadden’s conduct and the problem seemingly being one of his own making, the publicity surrounding the case has been negative for the landlord, as the law of forfeiture has (because of Mr McCadden’s failure to engage and seek relief) given the landlord a windfall gain.
At Realty we will always take account of any potential reputational damage when advising our clients as to an appropriate strategy for dealing with leaseholder default.