We will undertake searches at the Land Registry to confirm ownership of the leasehold property and to establish whether there is a mortgage lender registered against the property. These checks are usually best undertaken as soon as we are instructed.
Letter before action
Before court action is contemplated, we start the process by writing a letter before action to the lessee at each of his/her addresses, setting out the breach alleged and requiring its remedy within 30 days which is compliant with the Pre-Action Protocol for Debt Claims which came in to force on 1 October 2017.
The usual recovery pattern for a monetary breach is that the majority of lessees pay once they receive a letter before action. However, a minority do not. In those cases, we usually recommend the issue of proceedings to obtain the required determination in the County Court. Where appropriate, however, we will review each situation on its merits and tailor our advice and recommendations accordingly.
Issuing court proceedings
In cases where the breach is solely monetary, the claim will be issued in the County Court. In default of a reply from the lessee to the claim, a judgment will be obtained, which amounts to a determination for the purposes of the relevant statute.
Service of proceedings
We will usually ask the Court to serve proceedings through the post. The lessee then has 14 days to respond to the claim from the deemed date of service and up to 28 days to file a defence.
If the lessee fails to acknowledge service or defend the claim in time, you are entitled to enter a judgment in default.
It will be vital, therefore, to notify us if you receive any money, since a judgment can adversely affect a lessee’s credit record.
This can be a key step in recovering your money and should be taken if obtaining a default judgment does not secure payment.
As an initial step, we will serve a copy of the default judgment on the lessee and on the mortgagee, giving them 14 days to make payment in full.
Where we are acting for the landlord, the terms of the lease can be enforced by reliance upon the landlord’s right to forfeit the lease. Notice of the landlord’s intention to forfeit will be served pursuant to section 146 of the Law of Property Act 1925 if the debt remains outstanding.
If the lessee fails to comply with the section 146 Notice the landlord can commence action for possession of the property.
It is uncommon for a matter to reach this stage, as usually the lessee, or the mortgage lender will discharge the debt and legal costs following service of the default notice or subsequent section 146 Notice.
Where we do not act for the landlord, we are unable to proceed with a section 146 as a means of enforcing your judgment and we would advise you at this point of the enforcement options available to you.
Reports/Provision of Management Information
It is a key priority for our clients to be kept informed and we will often report on the following actions as a matter of course:
• On acknowledging instructions and confirming first letter has been sent
• On issuing proceedings
• On entering judgment
• On drafting and serving a section 146 notice
• On drafting and serving possession proceedings
• On preparing for a possession hearing
• On commencing other enforcement options if necessary
• On confirming the outcome of enforcement action
We aim to recover our costs in full from the lessee and we will always advise you how much an action is likely to cost.