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Lease terminates before headlease

Re: Lease terminates before headlease

Postby atticus » Tue Apr 05, 2016 8:54 pm

and any other losses that may have been suffered.
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Re: Lease terminates before headlease

Postby victoriana » Tue Apr 05, 2016 10:10 pm

Is it possible that "any other losses" could include the payment of service charges? Even though "she owned an interest in the flat", was she still liable to pay any upkeep towards the building in the absence of an underlease? I would have thought that without a deed which is after all a form of contract, there would have been no covenants to adhere to. Perhaps I am pushing the boat out too far but I would like to find a credible way of topping up those losses so that legal action can be taken with the protection of an insurance policy in place.

We sent a letter in a similar format to the one suggested on here but there has been no response.
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Re: Lease terminates before headlease

Postby atticus » Wed Apr 06, 2016 6:01 am

If she had had a proper lease (as she thought) would she have been liable to pay service charges?
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Re: Lease terminates before headlease

Postby victoriana » Wed Apr 06, 2016 8:04 am

If she had had an underlease as she thought, then yes she would have been liable to pay. But the underlease only came in to existence just prior to selling her property.
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Re: Lease terminates before headlease

Postby theycantdothat » Wed Apr 06, 2016 8:52 am

The service charge was still payable. Whilst the purported underlease was not in fact an underlease it was still an assignment and covenants in an assignment are enforceable to the same extent as covenants on any other transfer of an interest in land. One of the rules relating to the enforcement of non-lease covenants is that positive covenants (that is an obligation to do something as opposed to an obligation not to do something) are only enforceable against the original covenantor. An exception is the rule in Halsall v Brizell which says that you cannot take a benefit under an instrument without taking on the corresponding burden. Your friend had the benefit of the maintenance carried out by the head tenant and was therefore under an obligation to pay for it.

I do not think there is anything to be gained by looking for damages beyond reimbursement of the costs. Your friend thought she had something which someone offered to buy for x pounds. She did not have have quite what she thought she had, but ended up getting it and sold it for x pounds, so there was no loss there. The only quantifiable loss is the costs of putting things right. If you get to the stage where you decide to take counsel's opinion then by all means ask counsel if any further damages can be claimed, but if your friend is going to be a litigant-in-person she needs to keep it simple. If she gets her costs back she will be all square.
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Re: Lease terminates before headlease

Postby victoriana » Wed Apr 06, 2016 9:07 am

Is the cost of specialist advice from a barrister a potential loss recoverable from the solicitor?
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Re: Lease terminates before headlease

Postby atticus » Wed Apr 06, 2016 6:49 pm

That would be part of your legal costs.

cf. Costs in cases allocated to Small Claims Track (or in other cases where damages of less than £10K are awarded)
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Re: Lease terminates before headlease

Postby victoriana » Thu Apr 07, 2016 10:57 pm

Just to clarify, the judge in a small claims court can legitimately order that the solicitor pay back my friend's costs which would include the fee for advice from a barrister?
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Re: Lease terminates before headlease

Postby atticus » Fri Apr 08, 2016 7:25 pm

I can clarify that that would be an exceptional outcome.
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Re: Lease terminates before headlease

Postby theycantdothat » Sat Apr 09, 2016 9:45 am

First your friend needs to exhaust the firm's internal procedures for resolving the issue. If the outcome is unsatisfactory, the next step is to consider whether to start a claim in the County Court or take counsel's opinion. Whichever step is taken, there is the possibility of incurring further costs which may be irrecoverable. That is when one asks the all-important question: Am I throwing good money after bad? Issuing proceedings may encourage the firm to make an offer. Site of a counsel's opinion which indicates a claim is more than likely to be successful may encourage the firm to make an offer. It depends on what degree of brinkmanship the firm go in for.

Even if it gets to court and the court decides in your friend's favour, there is no guarantee that the whole of the additional costs will be recoverable. Questions may arise as to whether all the costs were reasonably incurred and if the amount of the costs was reasonable. Was the firm offered an opportunity to comment on the legal position before the costs were incurred?
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