There are many different steps that can be taken to prevent service charge issues from arising. If issues do arise then there’s still a lot that can be done to nip them in the bud.
Making a claim or defending a claim in the County Court or the Property Tribunal does not have to be the inevitable when instructing lawyers. There are rarely any true winners when cases disputing service charge end up at a contested hearing.
Here’s what we think you should expect:
Verified data
None receipt of demands or demands being incorrect is the biggest reason we hear for non-payment. Checks should be made of the information you provided. Are the demands in the right format? Do they need to be re-served? Are the leaseholders details correct according to information stored at the Land Registry? Are the leaseholders whereabouts known? If unsure, a trace can be carried out. All of this pre-claim work should be taken off your desk and carried out on your behalf.
Fast Collection
Put simply, service charges are contractually due but issues surrounding non-payment can sometimes be complex. Arrears chasers should have a laser-like focus on collection not just following process. Specialists are key. Well-trained and experienced advisors are invaluable and will settle a case in far less time than a case handler who is not.
Less Expense for All
Arrears increase over time if not collected quickly and so will legal fees if more and more (potentially unnecessary) work is undertaken. However, solicitors should avoid excessive additional costs for the leaseholder by concluding the case quickly and correctly. No win no fee is the industry standard. However, you should check the actual details of the arrangement. Are you receiving invoices from your legal provider that you were not expecting?
Resolved Issues
A crucial aspect of expertise is being able to spot the correct issues to concentrate on. Often there is voluminous correspondence to deal with in a disputed arrears case or lengthy telephone calls to be made or received. Your lawyers need to be able to cut through the rhetoric and get to the crux of the case quickly and amenably to expedite payment.
Protected Reputations
Debt and arrears can be sensitive subjects. It is essential that reputations are kept intact and where possible relationships are built on between all parties. Arrears cases need to be handled with care. A badly handled arrears case can lead to untold consequences. Relationships can be soured very easily in the wrong hands and there is potential to undo months of hard work that you have put in to nurturing a relationship with a landlord or maintaining a development. Do you know your legal providers plan and what their approach is going to be?
It’s the traditional “year end” in the world of service charges. It will soon become clear which leaseholders have made payment and which ones will need more chasing.
When considering who to outsource your debtors list to, we hope the above list will aid your decision. Choosing the right provider will in turn help to push standards up across the industry for all.
Laura Severn is the Owner/Director of LMP Law
