A different approach to Debt

When clients seek help from solicitors with recovering service charge arrears, it’s usually because they’ve hit a bit of a brick wall and their debtor lists are becoming a cash flow problem. Putting the following questions to them often helps them approach service charge recovery a little differently and relieves some of the stress further down the line:

It may sound simple but increasing the regularity of bank reconciliations to daily or weekly can mean that leaseholders who have paid get their payments acknowledged more accurately. They are not then chased and related unnecessary work is minimised. This can also avoid jeopardising any ‘no win, no fee’ arrangements you have in place with your legal provider.

Accurate and up to date records should be standard best practice and it’s particularly important to keep a paper trail of events should a dispute arise. It provides timely evidence to back up your case and demonstrating good record keeping is generally rewarded at the First Tier Tribunal.

This question can be overlooked by landlords and managing agents, but the answer usually helps to identify the best course of action to resolve the matter as quickly as possible. Picking up the phone and talking to leaseholders to determine why they haven’t paid their service charges encourages open communication and helps to maintain good leaseholder relations.

Chasing unpaid service charges can be demanding for busy credit control teams, but these processes can usually be made quicker and more efficient. One way solicitors firms can do this is to integrate their clients’ processes with their own debt recovery systems, resulting in a more streamlined approach and quicker cash collections.

You should always try to maintain up to date contact details for your leaseholders but with the increase in overseas investors, or leaseholders moving to sunnier climes this can be tricky. Your legal team can still pursue leaseholders who are out of jurisdiction – it may just need a bit of detective work or specialised legal expertise.

With the right legal team behind you, service charge arrears recovery doesn’t have to be such a challenge and many obstacles can be avoided by approaching situations in a more sophisticated way.