Firm is trying to charge me twice for ground rent

Ms A.D. writes: I had not received any invoice from Simarc Property Management Limited for the ground rent on my home, so I sent a cheque for £131 in payment. A month later, I received a letter saying the ground rent was outstanding and Simarc was adding a further charge. I found my cheque had not been cashed, so I sent a new one, but Simarc has returned this and wants £263 within 14 days or it will instruct solicitors. I wonder why Simarc does not offer to accept payment by bank transfer. Is it because they can make people pay double?

SIMARC’S threatening letter is pretty blunt. It says your cheque for £131 is ‘unacceptable’, and adds that ‘our clients are not prepared to waive their rights in this respect upon merely receiving the sum of £131.’

The company later cooled off a little. It pointed out that you are responsible for paying the ground rent by the due date, but it added that ‘on this occasion we are prepared to reduce our administrative costs to £66’, cutting the total demand to £197.

But hang on a minute. The first letter makes clear that Simarc is just a middleman, demanding extra cash for clients who are not prepared to back down. Yet the second letter says that it is Simarc’s own ‘administrative costs’ that are being reduced. There is no mention of the clients who actually own the land on which your home stands, and whose ground rent Simarc is supposed to collect. So, who really makes the decisions?

Simarc, based at Borehamwood in Hertfordshire, told me: ‘Simarc Property Management is appointed by Wallace Estates Limited to collect the ground rent on its behalf.’

A demand was posted to you a month before payment was due, it added.

But that explanation came from Natalie Chambers. As well as being a director of Simarc, she is company secretary of Wallace Estates. Her colleagues Paul Langford and Michael Platt are also directors of both Simarc and Wallace Estates. There are numerous earlier examples of overlapping directorships.

So when Simarc claimed in its first letter that it was just obeying orders, the truth is that Simarc and Wallace Estates are almost one and the same thing.

It would be unpleasant to think that it would be in the interests of Simarc and its bosses not to issue ground rent demands, or to obtain proof of posting, since this would allow them to impose huge penalty charges. Natalie Chambers has assured me this would never happen.

It would be ‘morally reprehensible’, she explained. She added that Wallace Estates needed the ground rent because it had borrowed money from pension funds and needed to service these debts. The bottom line though, is that there is no level playing field between you, the leaseholder, and Wallace Estates, the freeholder.

Simarc cannot show that a demand was ever issued or delivered, and it and Wallace stand to benefit from penalty charges. The size of the charges is also questionable when all that was needed was for someone at Simarc to pick up the telephone and ask you whether you had received the demand.

You have told me there have been occasions in the past when you have not received an invoice until you had already paid and requested one.

I understand you decided to pay the reduced demand to avoid legal proceedings, but Natalie Chambers has told me you can pay by direct debit. I think that would be sensible as it puts the responsibility on Simarc to collect the ground rent. It could hardly penalise you if it then failed to collect its own cash on time.