Can we have different payment plans for Service Charges for different Lessees

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    Can we have different payment plans for Service Charges for different Lessees

    We are a small RTM Co. and look after 42 flats. Half are owner occupied, the other half are rented out by their owners. When we send out the half yearly Service Charges can we have two different payment plans, one for Landlords letting out their flats - six monthly invoice paid within one month and another for owner occupiers who might like to pay the invoice monthly over a five month period. There is no guidance regarding this in the Lease. The Lease was written 55 years ago and is very vague on these matters.

    #2
    We need t see the lease. It sounds like it is strange. Mine requires full payment within 21 days, and payment plans would only be invoked for those in financial distress, and basically involve waiving the the breach of the lease.

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      #3
      I agree with leaseholder64 as to only varying the lease for financial distress. It is good you feel managing 42 flats is a 'small' RTMC. Do you have an agent?

      When we formed our RTMC with almost half your units, we wanted to be helpful and issued prefilled bank mandates allowing flats to pay monthly after receiving their invoice (which is due half yearly in full). Within two years we abandoned this largesse and reverted to the lease. In your case, instead of managing 42 receipts every six months and able to identify miscreants within a month thereof, you are creating N x 12 opportunities to fail to pay and all the debt recovery hassle this causes. It is a pain for cashflow management.

      As for penalising the commercial coves arbitrarily, if they find out and simply pay monthly anyway, what is your legal grounds to proceed against them? I don't know if there is caselaw on this, but I wouldn't bet my favourite jam sandwich on a judge siding with you. The right to manage is not the right to run a 'club' by your own rules. Stick to the contractual lease (which is all an RTMC exists to manage) and provide payment plans for those who show genuine need. My advice anyhow.
      Do not read my offerings, based purely on my research or experience as a lessee, as legal advice. If you need legal advice please see a solicitor.

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        #4
        Originally posted by Paternoster View Post
        We are a small RTM Co. and look after 42 flats. Half are owner occupied, the other half are rented out by their owners. When we send out the half yearly Service Charges can we have two different payment plans, one for Landlords letting out their flats - six monthly invoice paid within one month and another for owner occupiers who might like to pay the invoice monthly over a five month period. There is no guidance regarding this in the Lease. The Lease was written 55 years ago and is very vague on these matters.
        Cannot help but think there is some animosity towards those who let their properties out. Seems bordering on provocative – ideally having everyone pay monthly eases cash flows for every party and you are more likely to gain trust and respect and enable you to deal with other issues more easily

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          #5
          So when some lessees demand to be allowed to pay in the same way as others you are going to refuse to let them do that..... of course that is not going to fly.

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            #6
            No the intention here was to try and help those who live here if they get into any difficulty in paying, but on the other hand not allow the Owners who let out their flats to have the same payment plan. Those who rent out their flats notoriously are late in paying to the extent that we are having to go to the Small Claims Court on this occasion to get two to pay, whilst the average owner occupier, most of whom are retired pay up within the two months timescale allocated.

            What I was wondering and was the original intention of this post was to see if we could let the owner occupiers have the usual two months to pay their Service Charge but to reduce this to one month for those who sublet their flats.

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              #7
              Originally posted by Paternoster View Post
              What I was wondering and was the original intention of this post was to see if we could let the owner occupiers have the usual two months to pay their Service Charge but to reduce this to one month for those who sublet their flats.
              I already said -- I cannot see how that will fly.

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                #8
                Thank you for the update, I concur and cannot see how that would work. I will continue with sending out the Service Charges half-yearly but only allow ALL a period of one month to pay.

                We have had problems with one Landlord who will not pay until the last minute, then wait for the reminder before reluctantly paying. When we took over as a RTM he owed the Freeholder in the region of £10K in back Service Charges which they had unfortunately not chased up for payment. I do not want anything like that to re-occur.

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