Service charge recovery, collecting the service charges for you
Effective property management is dependent on good cashflow and effective credit control. Contractors paid on time are happy contractors, who will be pleased to attend to your next emergency. Each owner signed a lease or transfer thereby promising to pay their service charges on time (usually within 21 days of the due date). Human nature means that people pay the creditor who means business and to preserve cashflow, blocks of flats must be run as a business.
We understand that there is a difference between ‘cant pay’ and ‘wont pay’ and therefore stage 3 of our debtchase process is to send out ABC Estates’s financial hardship policy inviting owners to admit the arrears so that we can go with them for help from their mortgagee not against them via the courts.
To encourage people to pay their service charges on time, sanctions we use include:
- adding interest to arrears,
- sending polite reminders,
- offering ABC Estates’s financial hardship policy,
- issuing a final notice,
- verifying the legal owner by carrying out a Land Registry search,
- applying for a money judgement from the County Court,
- seeking payment of the judgement from an owners mortgagee whose security is threatened,
- calling the debtor to court for questioning to obtain an attachment to earnings order,
- registering the judgement as a unilateral notice or charge against the property,
- applying for an order for sale of the property to discharge the debt
If you are concerned about the costs of legal action then talk to one of our team as depending on your lease these will either, be recoverable
- from the lessee in default
- from all owners at large
- as a Schedule 11 administration charge from the owner in default.
In some instances to assure recovery of costs it may be necessary to 1st go to the Tribunal to confirm the breach of lease to get clearance for Section 146 forfeiture action, whereby recovery of costs will be assured.
We have the experience to deal with issues of ‘reasonableness’ or ‘legal recoverability’ at Tribunal and will seek to mediate between the parties where possible.