Service Charges - Getting it wrong

• Identify the correct name of the Freeholder/Management company
• Identify the Landlord with an address for service
• Identify the correct Lessee and address (Problems arise when the owner doesn’t live there and has speci¯cally requested demands be sent elsewhere).
• If in Wales, serve the Statement of Rights of Obligations in Welsh and English

3. AVOID DISPUTES

“Communicate with Lessees”. The Lessees know what they are getting, the likely costs, and are more likely to pay.

4. FORFEITURE OPTIONS

Don’t assume you have the right to forfeit for non-payment of service charge.

5. LVTS CAN DAMAGE YOUR WEALTH

Many LVT cases are badly prepared. If a Property Manager has an appallingly prepared case, it is not surprising the LVT may sympathise with a Lessee arguing the services provided are sub -standard . Also, property managers will reveal charging structures, practices and procedures to organisations interested to learn how they operate. Decisions are made public on the internet.

6. DOCUMENTATION

It is vital on a building management handover that the incoming managing agents receive all documentation from the former managing agents. Don’t take over the management of a block until it is provided. You will be unable to justify costs incurred from years before.

7. SPEED

Send Service Charge Demands early stating payment is required on the due date. Send a chasing letter 7 days later. As 14 days notice is required prior to commencing legal action, it could be 21 days after the due date before non-payment proceedings are commenced.

8. LENDERS

Some Building Societies that previously would pay service charges on behalf of borrowers on receipt of a letter before action, now require a Forfeiture Notice or possession proceedings to be commenced.

9. CONSIDER MEDIATION

Mediation is quicker and cheaper than litigation. It is also con¯dential. Other Lessees won’t know any settlement details.

10. UNDERSTAND POST-JUDGEMENT ENFORCEMENT OPTIONS

Options include: -
- Bankruptcy proceedings
- Attachment of Earnings against Lessee’s Employer;
- Bailiffs or Sheriffs
- Third Party Debt Orders to obtain monies direct from Lessee’s bank account.

11. DON’T BREAK THE LAW!

I f you can’t serve a valid Forfeiture Notice, don’t do it. You could be prosecuted for “harassing” debtors. You can’t threaten action when it is wrong.

12. WORK WITH YOUR LAWYER

Your Solicitor should be an extension of your credit control procedure. Collecting service charges successfully is the result of good teamwork.