Yesterday’s post must have made very unpleasant reading over Michael and Doris Stainer’s (pictured) breakfast croissant and coffee. The First Tier Property Tribunal, which took place at the end of January to hear the case against them for historic non-payment of service charges on their 19 holiday flats, has found unequivocally against them in a 34 page decision. This leaves them with a personal bill that with interest could exceed £200,000. They might also have discovered that Hallam Estate’s planning application for seven flats in the basement that was, back in 2014, presented to the Tribunal as evidence of their ability to fund future service charge payments, has in fact lapsed.
This Tribunal decision will clearly be welcomed by all the residents of the Grand, some of whom remember cases from the 1980s and 1990s, again about non-payment of service charges. In fact, it was these earlier cases that contributed to Michael Stainer being forced into an Individual Voluntary Arrangement in 1995 to avoid personal bankruptcy. At that point the service charge fund was owed £120,000 of which 7p in the pound was eventually paid.
The hearing itself was notable by Mr. Stainer’s absence from the Tribunal firstly on “High Court business” and then because of the alleged assault on him. He also failed, or chose not to provide, a witness statement, thus avoiding being interrogated before the Tribunal. This left his wife, Doris, to provide a defence which hinged around the failure of the Tribunal-appointed Manager, Mr. David Hammond to produce appropriate insurance documents. Here’s what the decision had to say about her participation:
“The Tribunal considers Mrs Stainer’s objections …… were without merit and a smokescreen to obscure her unwillingness to meet her obligations under the lease to pay service charges.”
The Tribunal also gave short-shrift to “general manager” Robert Richardson’s evidence, stating that he “was giving evidence on the instruction of Mr. Stainer who had chosen not to make a witness statement.”
“…credibility was damaged by his comments in two emails exhibited in the hearing bundles. The first email dated 9 January 2015 was from Mr Richardson to the Councillor (Tillson) who told Mr Hammond to apologise to Mr Stainer. Mr Richardson advised the Councillor (Tillson) that Mr Hammond should “expect a filthy response” to Mr Hammond’s offer of wanting to form a pleasant working relationship with him. The second email dated 10 August 2017 was from Mr Richardson to Mr Daggett (another leaseholder) stating that he had a meeting with Mr Hammond next week and “suggesting we are as bad as it is possible to be” towards Mr Hammond.
The final summing up by the Tribunal was brutally simple:
“The Tribunal finds in relation to Mr and Mrs Stainer’s liability to pay to services charges for 2013-14 to 2017-18:
Mr and Mrs Stainer have not accepted Mr Hammond’s appointment as manager of the residential part of The Grand.
Mr Stainer has deliberately frustrated Mr Hammond’s role as manager which has generated additional and unnecessary costs to the leaseholders through the service charge.
Mr and Mrs Stainer have a history of not meeting their responsibilities as leaseholders, and have contributed nothing by way of service charge since Mr Hammond’s appointment.
Mr and Mrs Stainer put forward no substantive case challenging the reasonableness of the service charges.
Mrs Stainer’s reasons for not contributing towards the service charge were “without merit.”
Mr and Mrs Stainer have a right of appeal to the Upper Tribunal, although it’s unclear what grounds can be put forward, since no substantive evidence was put forward by the Stainers, and the Tribunal has confirmed that all the service charge accounts were correct.
In general terms, non-payment of service charges can result in forfeiture of a property, or by the mortgage lenders paying up to protect their security.
