Debt collection for service charges
8:10 PM, 16th March 2015, 11 years ago
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I am a new Company Secretary for a block of 12 flats where each owner has a share of the freehold.
One of the owners has never paid any service charges since moving in despite reminders, emails and a telephone conversation.
He now owes about £2,500.
What is the best option for chasing debt? Small claims court? Involve a legal firm?
Also what costs may be added to bill e.g. admin fees, interest charges etc.
Any help would be gratefully received.
Thanks
Jim
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Member Since January 2011 - Comments: 12193 - Articles: 1396
8:12 PM, 16th March 2015, About 11 years ago
Hi Jim
Check out the member profile for David Carter >>> https://www.property118.com/member/?id=2542
.
Member Since March 2015 - Comments: 1
9:31 PM, 16th March 2015, About 11 years ago
Had this problem before but on a larger scale.
We used Frontline Collections as they were recommended to me on a accounting site for use as Debt Collectors. They’ve had pretty good results so far, more than I expected tbh
Member Since March 2015 - Comments: 2
1:57 AM, 17th March 2015, About 11 years ago
Hi Jim,
The first thing to check is always the lease. Check what it says about how each leaseholder needs to pay and what any interest you may be able to charge. You should also check that you’ve demanded the payment in the correct way and keep accurate records of each attempt you make.
A land registry search only costs a few pounds. It will tell you if there is a mortgage advisor. Write to them , with a statement of account. Explain that you are going to take legal action. They will normally pay the debt and send the mortgagee the bill.
If that doesn’t work, I’d recommend you use a professional to help. Where abouts are you based?
Dan
Member Since October 2013 - Comments: 17
6:56 AM, 17th March 2015, About 11 years ago
You need to review your invoices and ensure that all of the bills are legally compliant before you go legal. He may have an ace up his sleeve which then creates a bigger issue with other leaseholders. In 99% of cases you can resubmit invoices if there are compliance issues. Where are you based?
Member Since September 2014 - Comments: 1
7:21 AM, 17th March 2015, About 11 years ago
Thanks for your comments. I am based in Manchester
Member Since March 2015 - Comments: 2
8:23 AM, 17th March 2015, About 11 years ago
I would have been happy to help, but I’m based in London. The best block management company up your way is Estate Management Solutions, but I’m not sure if they will help out just with debt collection. It might be worth giving them a call.
Member Since June 2014 - Comments: 1562
8:40 AM, 17th March 2015, About 11 years ago
Reply to the comment left by “Dan Thurlow” at “17/03/2015 – 01:57“:
I don’t think it works like that any more Dan.
Mortgage lenders now require a court order before they will pay.
This is to help prevent fly by nights buying worthless freeholds and charging extortionate service charges.
Happy to proved wrong if you have any recent experience.
Member Since March 2014 - Comments: 143 - Articles: 129
9:10 AM, 17th March 2015, About 11 years ago
The only issue with debt collectors is that they will take a percentage of the sums due and usually steer you towards insolvency proceedings which is where many make their money.
If you wanted to use that route we have our own debt recovery company called ABC Debt Recovery and for a fellow Property 118 member I would happily reduce the rates to below anything that anybody else could offer.
http://abcdebtrecovery.com/
I can do this because our core business is the enforcement of judgments.
So whether it’s debt collection or the enforcement of a CCJ we will be happy to assist if required.
http://thesheriffsoffice.com/high-court-enforcement
Member Since July 2013 - Comments: 305
10:03 AM, 17th March 2015, About 11 years ago
Reply to the comment left by “Monty Bodkin” at “17/03/2015 – 08:40“:
Hi Monty. It does with the Bank of Ireland, I had a case last month. If there is a lender I would recommend contacting them and ask what their policy is for dealing with service charge debts.
Member Since November 2014 - Comments: 63
10:55 AM, 17th March 2015, About 11 years ago
I agree with Dan check the lease and that you’ve demanded the payment in the correct.
We have had a similar experience to Monty a lender who has paid up in the past has refused this time so we are off to court.