One of the largest managing agents in the UK instructed Brady Solicitors to support them in defending a claim issued against them by a leaseholder within a large multi-unit development in South East London. Brady Solicitors’ client needed to take service charge enforcement action to recover outstanding arrears from the leaseholder in question. However, the leaseholder alleged service charge recovery steps taken against them, specifically instructing solicitors, were improper and premature, and having made payment under protest, was seeking repayment of legal and administrative fees.
The Challenge
The leaseholder in question claimed a historic ‘floating charge’ arrangement which dated back to 2013, allowing them to defer excess service charges indefinitely without triggering any enforcement action. Had this argument been accepted, it could have left a significant shortfall in the service charge budget and placed the maintenance of the development at risk.
Brady Solicitors Role
Upon instruction Brady Solicitors utilised their experience and expertise to advise the client of what information and documentation would be required to prepare a successful defence. Once everything had been collated, Bradys conducted an initial lease review, before preparing a robust defence based upon the lease terms and evidence gathered. Following this Brady Solicitors, using their experience and established relationships, identified a suitable advocate for the hearing who was then supplied with a comprehensive hearing bundle and briefing by Brady Solicitors, ensuring they were extremely well prepared for the hearing.
In addition to collating the information for the defence at the hearing, selecting a suitable advocate and briefing the advocate, Brady Solicitors were also responsible for identifying and evidencing the lawful basis for:
- Charging interest under a clause with the lease
- Recovering administration fees under a separate clause
- Instructing solicitors following repeated reminders and non-payment;
- Dismissing the existence of any binding “floating” charge arrangement.
Conclusion
The case was heard in July 2025 with the judge dismissing the claim in full, largely thanks to the strength of the evidence displayed within the managing agent’s defence. Based upon the information provided, the Court found that the leaseholder had been given ample opportunity to settle before legal action was taken, that the charges were valid and recoverable, and that no agreement existed to defer payment. Additionally, the leaseholder was ordered to pay the clients’ legals costs and expenses associated with the case.
The verdict of this case in the short term ensured there was no shortfall in the service charge budget for the associated block and safeguarded cashflow for necessary maintenance works. However, it also served as a reminder of all parties’ responsibilities and obligations as detailed within their lease moving forward.
