Recovering service charge arrears in property rentals

Chasing up the non-payment of arrears, when someone who owes your business has not kept up with payments, can be stressful as well as a financial drain on your business.

What are service charge arrears?

Service charges are those that a tenant or leaseholder pays in order to cover the costs of things like maintenance, insurance and energy usage in shared areas. Failing to keep up with payments means you have to waste time chasing up payments.

Unfortunately it is your responsibility to chase up the outstanding payments and ensure that creditors, such as service providers, are paid and standards are maintained.

Recovering service charge arrears can be a complex and difficult process, with potential pitfalls created by legal technicalities. To ensure that your company does not fall foul of these pitfalls and end up in a time-consuming, costly dispute over unpaid service charges, it's advisable to appoint a solicitor with experience of helping commercial landlords to help bring about a quick resolution.

What are the best routes to recovering unpaid service charges?

In some cases, all that is required to resolve the issue of service charge arrears is a seven-day letter of demand. This should be carefully worded to ensure it can be used as evidence during court proceedings should your case go to court – so may require the input of a solicitor.

If a letter doesn’t bring about a payment, then you may be able to serve them with court proceedings. Before doing so, you’ll need to calculate how much additional interest and costs will be included in the amount you are claiming for through the courts.

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Do I need a solicitor to help me recover service charge arrears?

Specialist property solicitors with experience of recovering service charge arrears will help you to ensure that all your communication with leaseholders and tenants is as effective as possible while remaining compliant with property law.

At First4Lawyers, our solicitors can guide you through the process of bringing court proceedings against tenants, where necessary.

If your tenants fail to engage with proceedings and a court hearing is therefore not possible, our solicitors could help you to obtain a default judgment, which should allow you to recoup the money owed to you.

I am having problems collecting service charge arrears from my tenants – what should I do?

First4Lawyers will appoint a legal specialist to your case, who will work toward the resolution you’re looking for. The first step is getting in touch with our advisors for a no-obligation discussion. Speak to one of them to find out whether you have a case.

You might also be interested in landlord and tenant disputes and tenancy agreements

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