DRN-1852552 – Service charge payments made to a managing agent and charged to the mortgage; complaint not upheld
What happened: A complaint that Rooftop made payments to a managing agent claiming service charges on a leasehold property and added the cost to the mortgage balance. Rooftop had received copies of county court judgments recording that the borrower owed the managing agent money, and a copy of a section 146 notice said to have been served on her. Rooftop wrote to the borrower each time it received a request for payment. The complaint was not upheld.
What the Ombudsman decided: Complaint not upheld.
The published decision records that the complaint was not upheld.
What mattered to the Ombudsman
- That payment was only reasonable where the lender genuinely believed its security was at risk
- That a threat to forfeit is not enough on its own — a court or tribunal had determined a breach
- That the borrower was notified of each payment request and given the chance to pay or challenge it
- That the lender still had to treat the borrower fairly and follow the regulator's Covid-19 guidance
These are the factors this particular decision treated as important. Ombudsman decisions are not precedent and another case can turn out differently.
What this does not prove
It does not establish that the service charges were correctly calculated or lawfully demanded, and it does not decide the borrower's dispute with the managing agent.
Source details
- Source type
- Financial Ombudsman Service decision
- Source
- Financial Ombudsman Service, final decision DRN-1852552 (Ombudsman: Ruth Stevenson)
- Date
- 15 September 2020
- Reference
- DRN-1852552
- Mortgage type
- Residential
- Jurisdiction
- United Kingdom
- Organisations
- Rooftop Mortgages Limited
- Source quality
- Official source
- Last checked
- 2 September 2026
- Added
- 2 September 2026
What happened
A complaint that Rooftop made payments to a managing agent claiming service charges on a leasehold property and added the cost to the mortgage balance. Rooftop had received copies of county court judgments recording that the borrower owed the managing agent money, and a copy of a section 146 notice said to have been served on her. Rooftop wrote to the borrower each time it received a request for payment. The complaint was not upheld.
What the borrower complained about
The borrower said Rooftop wrongly made payments to a company claiming service charges, that the company was not the freeholder and that ground rent was paid to a different company. She asked for a refund to her mortgage account, correction of her credit record and copies of correspondence. She also said she had never been served with any court papers.
What the Ombudsman decided
The Ombudsman recorded that the mortgage conditions allowed Rooftop to make such payments, but that she would only consider this reasonable where Rooftop genuinely believed its security was at risk — which she described as not when a freeholder threatens to forfeit the lease, but when a court or relevant tribunal has determined that there has been a breach of the lease, subject to a ground rent exception that did not apply. On the facts, county court judgments had been obtained, Rooftop had notified the borrower of each request for payment and given her an opportunity to pay or challenge it, and there was no evidence she had applied to set the judgments aside or asked a tribunal to rule the charges unfair. She reminded Rooftop of its obligation to treat the borrower fairly and to take account of the regulator's Covid-19 guidance, under which lenders should not start or re-start possession action until after October 2020.
Outcome
- Complaint not upheld.
Key extracts
“I'd only consider this reasonable if Rooftop genuinely believed its security was at risk. This is not when a freeholder threatens to forfeit the lease, but when the matter has been to court”
Ombudsman, final decision DRN-1852552
“I'd remind Rooftop of its obligation to treat Ms S fairly, and take account of guidance issued by the regulator … related to the Covid-19 pandemic.”
Ombudsman, final decision DRN-1852552
Why this record may be relevant
This decision sets out the threshold the Ombudsman applied before a lender may pay disputed third-party sums and add them to a mortgage account.
Source
Financial Ombudsman Service, final decision DRN-1852552 (Ombudsman: Ruth Stevenson)
View original sourceThe date shown is the date stated in the published decision by which the consumer was required to accept or reject it.
If you believe this record is inaccurate or incomplete, see corrections and right of reply.