How to recover unpaid service charges
The leaseholder is required by the terms of their lease to pay the service charges and ground rent as determined by their lease in advance of the anticipated year’s expenditure. Any non payment will result in a breach of the lease.
The landlord or resident management company would be required to collect the service charges and should initially try proactively to seek to get them paid, for example, finding easy ways for payments to be made, i.e. direct debit or making a concession as long as a precedent is not set.
Many leases allow late payment interest fees to be charged by the landlord where leaseholders breach their lease by late payment.
If you are a Residents Management Company, a Managing Agent or even a Landlord, then statistically, service charge arrears are the main causes of disputes between freeholders and leaseholders.
A service charge is the cost of providing services for a property which usually contains multiple dwellings.
In the vast number of cases these charges are 'fair and reasonable' and expected by the leaseholder and usually include some or all of the following:
General maintenance.
Building Insurance.
Security, heating, cleaning and lighting of shared areas.
Repairs
Landscaping and general gardening.
Provision and servicing of lifts.
Management Costs.
Reserve fund contributions.
