Debt collection for service charges

by Readers Question

20:10 PM, 16th March 2015
About 6 years ago

Debt collection for service charges

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Debt collection for service charges

I am a new Company Secretary for a block of 12 flats where each owner has a share of the freehold. Debt collection for service charges

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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Comments

Gary Nock

0:13 AM, 19th March 2015
About 6 years ago

And as a Director of several RTMs and an Associate Member of the Institute of Residential Property Management....please consider using a Managing Agent. Been there done the self management thing. Block Management is complex. Use a professional who knows what they are doing.

Adrian Jones

8:27 AM, 19th March 2015
About 6 years ago

Reply to the comment left by "Gary Nock" at "19/03/2015 - 00:13":

Fine if you want to pay an inflated fee and get ripped off for insurance and maintenance etc.

Mark Alexander

9:11 AM, 19th March 2015
About 6 years ago

Reply to the comment left by "Adrian Jones" at "19/03/2015 - 08:27":

As with everything in life Adrian, it depends upon the business you choose to be a customer of. Good managing agent earns their money.
.

Adrian Jones

9:19 AM, 19th March 2015
About 6 years ago

No problem with good agents earning their money, it's the money grabbers that I object to.

In my experience these are the people who also provide a poor service.

Gary Nock

9:25 AM, 19th March 2015
About 6 years ago

Adrian if the Block is operated by an RTM or an RMC then this just doesn't happen. As Directors of an RTM you dictate what is paid for what. Insurance - you arrange your own via the Managing Agents following quotes. Management Fees - I have some Blocks where we pay £100 per unit per year. Maintainence - again as an RTM Director you really do call the shots. I generally manage to halve service charges when we move from the Freeholders managing agent to one appointed by the RTM, or in the case above, the leaseholders who own the Freehold. And in the case above you can see what happens when leaseholders try and manage it themselves. There are also pitfalls in self management. Fail to follow Section 20 procedures for works over £250 per flat. Can't claim it back in service charge. Fail to send out demand in the right format and font. Not collectable. Fail to respond correctly to Section 21 demand for information on accounts. Criminal offence.

Is it really worth it for about £2.50 per week per flat? And no I am not a Managing Agent touting for business. I am a landlord who has taken over 100 flats out of Freeholder control and into RTM. So I have been there and got the "T" shirt.

Mark Alexander

9:25 AM, 19th March 2015
About 6 years ago

Reply to the comment left by "Adrian Jones" at "19/03/2015 - 09:19":

On that we agree, the good thing about RTM's is that they choose the managing adverts.
.

Advance Block Management

9:50 AM, 19th March 2015
About 6 years ago

I agree with what Gary Nock is saying. At times RMC thinking they are saving money by avoiding having a managing agent will actually spend alot more.

If you are a RMC (which you are), the budget which the agents draws up and the contractors, insurers thats arranged on site can be decided by the board of directors of the RMC. The agents are there to give you advice and guidance and to make sure everything is running smoothly.

Contact some agents and ask for their fees. This way you may be able to calculate how much your service charge will be based on that. Go for agents that calculate their fees based on per unit per annum basis (which is fixed) and not based on the annual expenditure (which can vary).

Mark Alexander

10:03 AM, 19th March 2015
About 6 years ago

Reply to the comment left by "Advance Block Management" at "19/03/2015 - 09:50":

It is a pleasure to have you on our site, commenting on issues such as this.

We do have promotional opportunities which you may wish to consider too, please see >>> http://www.property118.com/house-rules-business-sponsorship/

Your credibility will no doubt grow amongst our the more you comment and this in turn could well lead to them contacting you about forming RTM's and appointing you as managing agents as their first port of call 😀
.

Advance Block Management

10:19 AM, 19th March 2015
About 6 years ago

Reply to the comment left by "Mark Alexander" at "19/03/2015 - 10:03":

It's a pleasure being here. Thank you for providing the link, we may be in contact with you soon about this.

Yes it would be nice to be appointed as managing agents 😀 If anyone just wants free advice and guidance we would be happy to give that too.

Gary Nock

11:31 AM, 4th April 2015
About 6 years ago

Just to advise all those RTM prospects out there. We are all awaiting a final Court of Appeal decision on whether RTMs can take over multiple blocks on an estate basis. The case was heard in December but has not as yet as far as I know been decided on. If it does decide in favour of RTMs it opens the floodgates and takes away a core point of objection in the Freeholders Counter Notice. If it is decided that RTMs can only manage one block then the law has to be changed to enable RTMs to acquire on multiple Blocks.

So just keep your powder dry at the moment or it could cost a lot of money.

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