Successful property management is dependent on funds being available to management agents to carry out any maintenance required and to provide leaseholders with critical services promptly and effectively. Failure to collect outstanding service charges can create considerable problems, as well as generating additional work and stress.
The pursuit of service charge arrears must be handled carefully – these matters can be contentious, and defaulting leaseholders must not have a negative impact on a property manager's ability to deliver services, thus harming their reputation and relationship with other leaseholders.
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Expert service charge arrears advice
Service charges are charges payable by the leaseholder to the landlord. They normally include costs for maintenance, insurance and repairs of the building and communal areas.
Under the terms of their lease, a leaseholder may be required to pay service charges in advance of the expected year’s expenditure. Failure to do so will result in the leaseholder being in breach of their lease. Many leases will state that a late payment fee will be charged where a lease is breached by failing to pay service charges when they fall due.
How to recover service charge arrears
A lease will often allow for interest to be charged on unpaid service charges – typically at a rate of around 4% above base rate – to encourage timely payment of service charges. If the lease does not specify a rate of interest, we will claim interest at the current court rate of 8% per annum.
Where debt recovery proceedings are necessary, it is advisable to take a clear and robust approach with a zero tolerance to late payment. It should be explained to all leaseholders in explicit terms that payment of service charges is crucial to the running and maintenance of the property and the impact on market value that failure to adhere to the agreed payment schedule may have.
If payment of service charges is not made at the agreed time, it is advisable to send a reminder letter 14 days after payment was due. If payment is still not forthcoming, a second reminder should be sent after 21 days of the due date advising the leaseholder that legal action will be taken seven days after the date of this letter. Legal action should then be initiated 28 days after payment was due.
Taking legal action
Before initiating legal action, you should ensure that all letters provide your defaulting leaseholder with clear instructions, referring them to the availability of legal advice and providing them with a reasonable time to respond. If you request additional information from the leaseholder, you must give them sufficient time to provide this. You should also explicitly state what will happen if payment is not made by the required date.
These steps must be followed to ensure that the Civil Procedure Rules are satisfied and to avoid the court, striking out your claim. Our expert service charge arrears recovery team will work on your behalf to guarantee that relevant invoices and notices have been serviced to avoid any dispute upon the commencement of court proceedings.
How Chandler Harris can help
Whatever your circumstances, our service charge arrears recovery team will guide you through every stage of the debt recovery process clearly and with minimal fuss. Our team will take the time to discuss your options in detail, so you are completely satisfied before proceeding.
Chandler Harris will provide you with:
- Quick and effective service charge arrears recovery
- Pre-demand reminder service
- Regular monthly reports that are transparent and insightful
- A dedicated manager for your account who will act as a consistent point of contact and will be available to answer any questions and discuss any issues promptly
- Unrivalled expertise on all service charge arrears recovery matters
- Guidance and support on a wide range of property law matters
We are dedicated to providing a high-quality and client-focused service. Our service charge arrears service is recommended by the Legal 500, the leading directory of recommended law firms, and, as an ARMA Partner, our firm is committed to the professional standards of leasehold management.
At Chandler Harris, we have a team of specialist service charge recovery lawyers who will work on your behalf to collect outstanding debts quickly, successfully and at no cost to you as we recover our fee from the other party every time. Our skilled and reliable lawyers have many years of experience delivering practical results that facilitate better block management and improved relationships with your leaseholders.
Our work as a firm places a strong emphasis on property management, meaning that we have a comprehensive understanding of the tactics required to recover arrears fast – from notifying leaseholders of arrears to First-Tier Tribunal representation, our specialist team can help. Instructing a member of our team will not only aid your cash flow but enables your case to be progressed quickly. Our service charge recovery specialists will work alongside your in-house team to support you to manage your debtor list effectively.
No fee for service charge arrears recovery
The service charge arrears recovery services provided by Chandler Harris will not cost you a penny – we recover all costs from your debtors and we will never ask you for money to cover court fees, third party services or any other costs. We aim to make the recovery of outstanding service charges as straightforward and painless as possible – contact us today for immediate help in chasing up service charge arrears.
Commercial and residential service charge arrears recovery
At Chandler Harris, we regularly act on behalf of property owners across both the commercial and residential property sectors. From receiving instructions through to final remittance, we will work tirelessly on your behalf to ensure that arrears are recovered as quickly as possible.
Our lawyers will provide you with a comprehensive record of all sums recovered encompassing all property-based debts including a breakdown of service charges, interest, administration charges, insurance and any other liabilities.
We appreciate the complexities that come with recovering service charge arrears and our attention to detail when collecting lease-based debts mean that we are excellently placed to manage all issues that are likely to be raised by debtors in the course of the collection process.
Contact our service charge arrears team
Our lawyers are here to help you recover outstanding sums fast. For comprehensive advice on collecting service charge arrears, speak to our team by calling 0161 834 2200 or complete our online enquiry form.