Service charge arrears

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    Service charge arrears

    Hi

    Really hoping someone can help with our dilemma. We have one owner who is permanently in arrears with the payment of service charges. It is a constant battle and we have engaged a debt collector try to recoup the money.

    We don't want ongoing issues with next years service charge payments The flat is let and as far as we know it's mortgaged. Would constant arrears be something the mortgage company would be interested in knowing and can we attach the service charge payments to the mortgage?

    Thanks.

    #2
    You would need to apply to a Tribunal to confirm the charges before a mortgagee would settle the balance.

    Comment


      #3
      Yep, just write to the mortgagee and say you are about to commence forfeiture proceedings for the arrears, they will most likely say they need a court ruling but quickest and cheapest way to do this is via MCOL.
      Regardless, they will write to the inconsiderate lessee which may do the trick.

      Comment


        #4
        Thank you for your responses. Can I also ask is it acceptable to disclose details of arrears in full at the forthcoming AGM.

        Regards.

        Comment


          #5
          Just to expand on #2 a mortgagee will not normally intervene unless there is a court or Tribunal decision against the leaseholder. In the rare cases where the mortgagee contacts the leaseholder regarding a claim, the leaseholder only needs to say that the debt is disputed to stop the mortgagee from paying, A MCOL is only quicker and cheaper if the debt is not disputed, in which case it would usually be referred to a Tribunal.

          Does the lease allow you to charge interest on the arrears? Have you tried speaking to the leaseholder?

          Comment


            #6
            Originally posted by mags69 View Post
            Thank you for your responses. Can I also ask is it acceptable to disclose details of arrears in full at the forthcoming AGM.

            Regards.
            No, you should comply with GDPR.

            Comment


              #7
              Originally posted by mags69 View Post
              Thank you for your responses. Can I also ask is it acceptable to disclose details of arrears in full at the forthcoming AGM.

              Regards.
              Yes because its simply reporting pertinent accounts. Probably best not name publicly but perfectly acceptable to advise level of arrears and by how many. The members and lessees who are subsidising the scrote are entitled to know.

              Comment


                #8
                You can refer to arrears in general terms but you are not allowed to make any statement which identifies an amount owing by an individual, which appears to be your objective,

                If you apply to the Tribunal to confirm the debt, you could refer to the decision because it would be in the public domain.

                I strongly recommend that you speak to the leaseholder, enquire if there are any reasons for non payment and suggest some form of ADR to resolve your differences before they escalate out of control.

                Comment


                  #9
                  Employ a specialist firm to take the case on for you, we have 100% success with a particular outfit in recovery from mortgage companies.

                  DM me if info required.

                  Comment


                    #10
                    The only way that you can obtain 100% success is by obtaining a court order or a Tribunal decision and at that stage there is no need for a specialist firm, you can simply apply to the mortgagee and supply evidence of the arrears.

                    Comment


                      #11
                      Try demanding the service charge arrears from leaseholder, through the small claims court .

                      Comment


                        #12
                        Have you asked the leaseholder if there is any reason for non payment of the service charges? You have a duty to avoid legal action if possible.. The problem with legal action is that neither of you is likely to "win" and it does not help the relationship moving forward.

                        Comment


                          #13
                          Originally posted by eagle2 View Post
                          The only way that you can obtain 100% success is by obtaining a court order or a Tribunal decision and at that stage there is no need for a specialist firm, you can simply apply to the mortgagee and supply evidence of the arrears.
                          To be fair, the assistance given by a 'professional company' may be to obtain the court/tribunal decision (not all freeholders/RTM directors will always feel confident about doing that alone).

                          People experienced with dealing with arrears may also have success collecting arrears without needing to go as far as getting official decisions - just by knowing how best to present the facts to the defaulter in a way that makes it clear that they will lose, and incur more costs, if the matter does go to court.



                          I completely agree with your later comment regarding finding out why they haven't paid though - which should be the first step taken regardless of whether or not a 'professional' is used.
                          Of course, if a professional is employed and they get the defaulter to pay of their arrears eventually via small instalments, the 'professional can still honestly say that they have 100% success in getting arrears paid (especially is they get their fees paid by the defaulter as well).

                          Comment


                            #14
                            I have yet to find any professional firm which has a 100% success rate in court or at a tribunal and recovering all the costs is by no means a certainty. It is irresponsible to make such claims and there would only be one winner and it would be neither of the parties. Both sides should be made to sit down together and exactly what is involved should be explained to them, they should then be encouraged to discuss and settle their differences.

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