Yahoo Finance Crying foul: footballer told he could lose his house over unpaid bill
Professional footballer Zeli Ismail had never heard of a“rentcharge” when he bought his freehold home in Wolverhampton in May 2015. But the overlooked clause in his property’s deeds has led to the Bury midfielder facing large legal bills and threatened with eviction.
Ismail’s story is rare – but terrifying. He bought his home outright, and settled down to family life with his partner and young daughter. The first time the 24-year-old saw the word “rentcharge” was when he received a solicitor’s letter in December 2017 incorrectly describing him as “a tenant”. After a call, an amended letter arrived in January this year entitled “Outstanding rentcharges and fees” and included an invoice for backdated charges of £112.51, £3.61 interest, £240 for two letters, and solicitor’s fees of £480.
The letter stated that if the total bill of £836.12 wasn’t settled within 21 days, the client “intends to either re-enter the property or grant a lease in respect of the property”. It went on to say that either would have “a detrimental impact on the value of your property and may result in our client applying for a possession order, and, ultimately, obtaining an eviction in respect of the property”.
The “client” concerned was the managing agent responsible for maintaining the communal parts of Ismail’s estate: the charge related to cutting the grass verges. The letter added that if Ismail didn’t pay, he would also be liable for the managing agent’s costs of between £3,000 and £5,000. The letter referred to “a lease”, despite the footballer owning the freehold.
Ismail assumed the letter was a mistake. It wasn’t.
“Rentcharges” (or “chief rents”) are a relic from the past. Despite the similar terminology, they are nothing to do with renting, or leasehold ground rents. Most originated in the 19th and early 20th century, and were a popular way for owners to sell land to developers at a reduced fee. The subsequent freehold owners would pay an annual fee, typically £2 to £10, for ever.
The Rentcharges Act 1977 meant that, with some exceptions, no new charges could be created after 22 August 1977, and existing ones were capped so they would expire in 2037. Unfortunately for the buyers of new-build freehold properties, “estate rentcharges” are one of the permitted exceptions.
By using a “deed of transfer”, developers can oblige freeholders to pay a “rentcharge” or “estate charge” for the maintenance of communal areas of a private estate. With both, it’s not the money that is of the most concern, but the powerful legal rights the “rentowner” – the person who receives the payments – has to recover sums due. In some cases, these include taking possession of the property and using the income to clear the arrears. Or granting a lease of the property to trustees to raise any money due. These rights arise if the charge remains unpaid for more than 40 days, even if payment has not been demanded.
Ismail’s partner’s mother, Tracey Atkinson, agreed to act as an advocate for him. She says: “The first communication he had about the charge was a threat of eviction from the solicitors. This had a huge detrimental effect. They were threatening eviction over a bill that was never received and the charges were all added on prior to the invoice dated 17 December 2017.
“I told him to pay the outstanding charges and said I would deal with the legal fees. The solicitors refused to accept a part payment and the rest, as they say, is history.”
In Ismail’s case, Bellway, which built his estate, maintains control over its management company. SDL Property Management collects the “rentcharge”. It then instructs another firm of solicitors to pursue unpaid charges.
Ismail’s charges were £37.50 every six months but it emerged the bills were addressed to the previous owners and it remains unclear whose responsibility it was to update the managing agent’s records.
SDL says: “When Mr Ismail bought this property in 2015 we were not made aware by him, his solicitors, the seller’s solicitors or the seller, that the property had been sold. For this reason, the request for payment of the estate charge was sent and addressed to the previous owner.
“After receiving no response, a Land Registry search was obtained and we discovered the property had been sold. We then sent the invoice to Mr Ismail but received no response.
“After sending two further reminders with no response, we followed standard procedure and instructed our solicitors to collect the debt on our behalf.
“Eviction was only mentioned as an absolute last resort and this was made clear in the letter. There was no ‘threat to evict’ – it is our responsibility to tell debtors the consequences of them failing to pay.”
Ismail has paid the charge and, after pressure from Atkinson, SDL has quashed the solicitor’s fees “as a gesture of goodwill” and rescinded the court action letter.
How to tell if there is a charge
The charge would usually be on a property’s “register of title” held at the Land Registry. This will tell you how much it is and details of the document that created it, but not always who it is payable to. “It will specify what happens if it is not paid. Typically, that the owner of the charge is entitled to interest on outstanding rent and, at worst, take possession of the property for non-payment.
“However, in reality, that is unlikely, as a court order would be required,” says Anna Sparrow, solicitor at Slater and Gordon. “Unscrupulous owners could, in theory, not demand rent and then charge late-payment fees and solicitors’ costs. So it is imperative to ensure it is paid.”
“Variable rentcharges” are more commonly found on newer developments to cover maintaining communal areas. Typically, this would have to be obtained from either the original transfer deed imposing it or the seller and company collecting the charges.
