Service Charge – Frequently Asked Questions
Q. I have already paid these charges
A. Please provide evidence of payment, such as a bank statement, payment receipt or transaction reference, within the timescale specified in the letter you have received. Upon receipt, we will investigate the matter and respond accordingly.
Q. I have not received an invoice for these charges
A. The invoice(s) and reminder correspondence were sent to the correspondence address or email address held by our client or their managing agent. Property owners are responsible for notifying the managing agent of any change of address or contact details and in the absence of such notification you are deemed to have received the documents that were issued.
Q. What options are available if I am experiencing financial hardship?
A. If you have a mortgage secured against the property, we may contact your mortgage lender and request that it settles the arrears on your behalf. Mortgage lenders will often consider doing so in order to protect their security over the property and any sums paid are likely to be recovered from you in accordance with the terms of your mortgage. Whilst some lenders may consider payment before legal proceedings are commenced, others require a County Court Judgment (CCJ) or other form of court determination before they will agree to make payment. Obtaining such a judgment may result in additional costs being incurred, which may be recoverable from you and, in some circumstances, added to your mortgage account.
Q. I am in financial hardship and do not have a mortgage, what can I do?
A. Payment must either be arranged from another source, or you should provide details of your financial circumstances together with a realistic proposal for repayment. Any request for a payment arrangement will be referred to the managing agent for consideration. Please note that the managing agent is not obliged to accept payment arrangements that fall outside the terms of the lease. Where a payment arrangement is agreed, an administration charge may be applied to cover the costs of setting up and managing the arrangement. Any proposal should provide for all outstanding sums to be paid in full before the next service charge demand falls due.
Q. I dispute all or part of the amount outstanding
A. You must contact us in writing within the timescale specified in the letter you have received. Please clearly set out the reasons for your dispute and provide any supporting documentation upon which you intend to rely. Once an account has been referred to us for recovery, our client and their managing agent will not normally deal directly with you regarding the arrears and will refer any enquiries back to this office. Accordingly, all correspondence relating to the outstanding balance should be directed to us.
Q. What happens if I ignore this letter?
A. If you do not respond to this letter, further recovery action may be taken. This could include contact with your mortgage lender, court proceedings and the recovery of additional costs, interest and charges where permitted by the lease and applicable law. Where a county court judgment is obtained against you it may affect your ability to obtain credit in the future.
Q. I do not have a copy of my lease
A. A copy of your lease may be obtained from HM Land Registry, usually for a small fee via this link https://www.gov.uk/search-property-information-land-registry.
Q. The managing agent will not discuss the arrears with me
A. Once the matter has been referred to us for recovery, all payments should be made directly to this office. The managing agent and our client will not normally deal directly with leaseholders regarding outstanding arrears and will generally refer recovery-related enquiries to us whilst our instructions remain in place. Accordingly, all correspondence and payments relating to the arrears should be sent directly to this office.
Q. Can I sell or remortgage the property whilst these arrears remain outstanding?
A. Outstanding service charge arrears may cause delays or difficulties if you wish to sell or remortgage the property. We recommend that any arrears are resolved as soon as possible.
Q. What happens if court proceedings are issued?
A. If the arrears are not resolved, court proceedings may be commenced. This may result in a County Court Judgment (CCJ) being entered against you together with liability for additional costs, interest and charges. A CCJ may adversely affect your credit rating and your ability to obtain credit in the future.
Q. I am no longer the owner of the property.
A. If you have sold the property, please provide details of the sale, including the completion date and, where available, details of the solicitors who acted on your behalf.
Q. I am a landlord and my tenant should be paying these charges.
A. Your obligations under the lease remain your responsibility. Any arrangement you may have with a tenant does not affect your liability to pay charges due under the lease.
Q. Why am I being charged legal costs?
A. Lease agreements normally include provisions permitting the recovery of legal costs and other administration charges incurred in connection with collecting unpaid sums. Details of any costs claimed are set out in our correspondence to you.
Q. What do the legal costs cover?
A. The legal costs relate to the work undertaken in connection with the recovery of the arrears on our clients’ behalf. The work required will vary from case to case and will depend on the circumstances of the matter and the stage at which it is resolved. This may include:
• Receiving and reviewing instructions from our client(s).
• Obtaining and reviewing Land Registry documents other relevant records.
• Reviewing account statements, payment histories and supporting documentation.
• Analysing the arrears position and the recoverability of sums claimed.
• Carrying out compliance, regulatory and conflict checks.
• Opening, maintaining and administering the file.
• Preparing and issuing letters and other recovery correspondence.
• Corresponding with our client(s), managing agents, freeholders, management companies and other relevant parties.
• Corresponding with you, your representatives and, where appropriate, your mortgage lender.
• Considering and responding to queries, disputes, representations and requests for information.
• Reviewing evidence and documents supplied by any party.
• Assessing repayment proposals and settlement offers.
• Negotiating payment arrangements and monitoring compliance with any agreed arrangement.
• Tracing and verifying contact information where necessary.
• Processing payments and accounting to our client(s).
• Maintaining records, management information and case management systems.
• Advising our client(s) on recovery strategy and the options available to them.
• Preparing the matter for any further recovery or enforcement action that may become necessary.
• Concluding, closing and archiving the file.
Q. Can I obtain independent advice?
A. If you are unsure of your position, you may wish to obtain independent legal advice.
