Gosport building owner criticised for trying to seize £120,000 flat over £3,000 unpaid service charge

A BUILDING owner tried to seize a £120,000 flat over £3,000 in unpaid service charges.
Havant Justice Centre. Picture: Sarah Standing (081119-1387)Havant Justice Centre. Picture: Sarah Standing (081119-1387)
Havant Justice Centre. Picture: Sarah Standing (081119-1387)

The court action happened in a claim against a grieving Gosport resident who faced possession proceedings initiated in lockdown.

A hearing at Havant Justice Centre was told the man with learning disabilities, who cannot be named, had lost his mother and went on in grief to ignore service charge bills from 2019.

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The man, who struggled to read and write, racked up around £3,100 in debt but had twice offered payment plans. These were rejected by the freeholder, which also cannot be named for legal reasons.

Closed Doors: Homeless in 10 minutes or less. An investigation led by The  Bureau of Investigative Journalism. Picture: Alice Mollon/TBIJ.Closed Doors: Homeless in 10 minutes or less. An investigation led by The  Bureau of Investigative Journalism. Picture: Alice Mollon/TBIJ.
Closed Doors: Homeless in 10 minutes or less. An investigation led by The Bureau of Investigative Journalism. Picture: Alice Mollon/TBIJ.

‘My head was buried when my mum died,’ he said in court. ‘When my mum died I didn’t really pay attention to life. I shut the door and pretended everything in the house wasn’t there.’

The case was uncovered as part of an investigation by The News and The Bureau of Investigative Journalism into evictions during the pandemic.

In court, regional tribunal judge Michael Tildesley said the freeholder company was looking at a ‘potential windfall’ in the flat’s value if it won forfeiture for the breach of covenant.

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But he refused to make a possession order and criticised the freeholder.

He said: ‘This is not a case which warrants an immediate possession order and my view is, for the reservations I’ve expressed about the whole process – and it’s recognised forfeiture proceedings can lead to potential abuse, in terms of the disparity in values – I’m also not minded to make a possession order suspended on terms.’

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He added: ‘There was no attempt, no attempt, to actually enter into any meaningful discussions with (the resident) in respect of this case.

‘The claimant will say it’s (the resident’s) responsibility to do that.

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‘But we were in unusual times and certainly in terms of possession hearings - although it doesn’t seem to apply here in forfeiture - there was certainly an obligation on the landlords to ascertain how a person had been affected under lockdown.’

He said the man should have been given a chance to ‘remedy the breach’ of his covenant after not paying the charge but ‘there was no attempt to do that’.

The judge said the man’s circumstances were not considered. ‘It’s quite clear to me that there was no regard to the individual circumstances of the individual involved,’ he said.

Decisions were made during lockdown with the section 146 notice – alleging breach of a lease – issued in February this year, and proceedings issued in March.

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Judge Tildesley ordered the man to pay £100 a week to clear the debt.

He urged the resident to keep on top of the current service charge and weekly court-ordered payment, or the freeholder could come back to court.

Judge Tildesley told the man: ‘There’s no possession order, providing you pay this money.’

A solicitor representing the freeholder argued the case should be heard in private but judge Tildesley, after hearing representations from The News, said it was in the ‘public interest’ to be in open court, albeit with reporting restrictions.

Banks seeking possession during the pandemic

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LENDERS sought to take back eight properties in possession hearings observed in a major investigation.

As reported, The News and The Bureau of Investigative Journalism witnessed landlords seeking possession orders to kick out tenants for unruly behaviour and arrears.

But during the investigation, carried out by observing hearings at Havant Justice Centre this summer, it emerged banks and mortgage lenders were also seeking to take possession of homes.

In one case a bank went to court over £1,000 in missed mortgage payments, despite knowing the self-employed mortgagee had a reduced income due to the pandemic.

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In another case the Bank of Scotland sought possession over around £5,000 in missed payments.

The court heard resident had secured a three-month payment window during Covid but thought it extended automatically to six months.

Until the pandemic hit the resident had paid on time each month but had difficulty through lockdown.

In both cases the judge ordered a suspended possession order - meaning the resident kept their home if they continued to pay up and keep up to date.

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Nationally the Bureau and its team of reporters found 342 possessions were sought by mortgage lenders out of 2,523 cases.

Lloyds Banking Group accounted for 38 per cent of those. This is despite it making up just 20 per cent of the mortgage market.

An analysis of 141 cases at Portsmouth's possession court found 24 per cent of these were mortgage cases, with 10 brought by Lloyds Banking Group and 12 by Santander

Lloyds Banking Group, comprising the Bank of Scotland and Lloyds, and Mortgage Business Plc, said: ‘We will do everything we reasonably can to support (customers) and only after we’ve exhausted all other options would we seek a possession order. We firmly believe repossession is a last resort. By working together, for every 100 customers who face difficulty, over 99 remain in their homes.’

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The Financial Conduct Authority warned the industry possession should be a ‘last resort’ in the pandemic.

Lawyers acting for mortgage companies, including the Bank of Scotland, requested hearings take place behind closed doors.

In some cases mortgage lenders asked for the hearings to be in private, meaning journalists could not attend.

Trade body UK Finance raised concerns with senior justice system officials and the Bureau’s funders citing ‘nervousness amongst mortgage lenders given the reputational risks’.

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UK Finance said there had been ‘very low levels’ of possessions in the industry and added: ‘UK Finance did not object to journalists attending court proceedings, nor did we ever seek to have them excluded from court.

‘All the communication we had with either the Bureau of Investigative Journalism or the courts was solely to seek clarification on the nature of the work and to offer our assistance if required.

‘UK Finance offered its full support to the Bureau of Investigative Journalism during its investigation, including use of our industry data, which shows very low levels of possessions.’

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