Debt Management fees on a leasehold property

[iby190]

Hi everyone,

I am new to this forum. I can't afford to see a solicitor at this moment in time and was advised to search for a legal forum and came across this. I am HOPING you can help me. I am 68 years old and I currently own a leasehold property for which I have to pay (extortionate) monthly management fees. For 2020, I managed to pay only for 6 months and then ended up in financial difficulty due to Covid. I was barely able to make ends meet. I stopped paying the management fees around June 2020. My plan was to pay them a lump sum at the end of the year, when things go back to normal and my financial situation improved. Government advised things would go back to normal but unfortunately this didn't happen and I ended up in a lot of debt. I even had to sell my car to pay back money I had borrowed from family members. I live alone and this whole pandemic situation has really affected me mentally. To make matters worse, the debt management company consulted a solicitor (Realty Law) as I was not able to pay them on time. The initial debt was £596.00 + £36.15 for interest (no idea where this interest came from). The solicitors have now added on legal fees of £721.50 increasing the total debt to £1353.65. I contacted them via email and offered to pay £50 a month for the time being until I can improve my financial situation, at which point I would pay them more. Their response was the following:

'Our client has advised that they cannot honour a payment plan for that duration and therefore we have been instructed to continue our recovery process and request judgment if payment has not been made by 2pm on Monday 26^th July 2021.

As such, we request that you please make full payment of £1353.65 as per the attached arrears schedule by 2pm on Monday 26^th July 2021. If payment or correspondence has not been received by then, then we shall be continuing with further recovery action and issuing a county court judgement (CCJ) which will incur additional fees.

You are entitled to seek your own legal advice.'

I don't know what to do. How do they expect me to raise that money in a few days. The whole idea of court proceedings and CCJs and ADDITIONAL FEES has really elevated my anxiety levels to the point I cannot sleep at night. Can someone please advise me on what to do from here? How is it acceptable to charge someone £700+ in legal fees for a few letters?

Any advice would be greatly appreciated.

Thank you in advance

[EnglandPi]

You posted this thread on 24th July which means the deadline for payment of 2pm on Monday 26th July 2021 has passed.

'Our client has advised that they cannot honour a payment plan for that duration and therefore we have been instructed to continue our recovery process and request judgment if payment has not been made by 2pm on Monday 26th July 2021.
As such, we request that you please make full payment of £1353.65 as per the attached arrears schedule by 2pm on Monday 26th July 2021. If payment or correspondence has not been received by then, then we shall be continuing with further recovery action and issuing a county court judgement (CCJ) which will incur additional fees.

This is an attempt to frighten you into submission but its a nonsense and as solicitors they should know better, they give debt recovery companies a bad name.

They are perfectly entitled to continue with further recovery action but they cannot issue a county court judgement (CCJ).

They need to follow the correct procedure by issuing you a pre-action protocol for debt claims if they have any intention of taking you to court. (Which gives you thirty days to seek advice).

If on the 28^th day you ask for a document or raise a query they have to give you a further thirty days before they can issue a County Court Summons and particulars of claim. Only a Court can issue a county court judgment and only if you lose your case.

We are living in strange times and the court service is backed up like its never been before. Pre-covid you could wait three months for a court hearing date,now its about ten to twelve months so no need to panic.


I dont believe their letter was actually written by a solicitor, dept recovery companies partner with solicitor firms and use the solicitors letterheaded paper but the person writing the letter is not actually a solicitor.

As any law student will know a solicitor cannot issue a county court judgement (CCJ) that is something reserved for a judge in a court of law and they have said this twice in their letter to you.

At this stage they are most probably working as a debt collection agency on a no recovery - no fee basis and they have added their debt recovery fees to the debt in the hope you will pay them and therefore it will cost their client nothing to use their services.

You are not obliged to pay their fees of £721.50 at this stage its just wishful thinking on their part. As for the interest of £36.15 this is a made-up figure. If they want to charge you interest, they need to tell you the percentage and the period of time say 99 days at 8% over the Bank of England base rate.

At the moment, or at least at the time you posted this thread you owed £596.00. Your offer to pay £50.00 a month is not in my opinion unreasonable given the covid situation we find ourselves in. I feel I must qualify my advice by telling you I am a debt collector for small businesses (the enemy) but unlike your pursuers I am a professional promoting best practice.

You should write to them admitting you owe £596.00 and send them £50.00 per month, every month. They wont refuse it and dont miss a payment. If you receive any more correspondence post it here.

[iby190]

Hi EnglandPi. First of all, I just want to thank you for responding to my enquiry. I have found the information to be really helpful. Words cannot express how grateful I am. I have only just seen your response today. The initial debt with the management company was £440.00 + £60 admin charge (late payment fee) from the management company + £96 referral fee which totals £596.00. The £36.15 on top of this is the interest charges. Up to this point, I have paid the ''solicitors'' £500. They coerced me into entering an agreement with them where I pay 1 x £500 and then £200 from there onwards. Out of fear I just ended up paying it which resulted in me falling behind on other bills (ended up in overdraft). I am willing to pay the management company the outstanding £96.00, but will not be paying anything towards the £721.50 legal fees at this stage. What are the chances they will take me to court and a judge rule in their favour and I have to pay the £721.50 plus further fees?

Kind Regards