This was a challenge faced by one of Brady Solicitors’ clients recently, where one disruptive leaseholder was causing significant management and cash flow problems in an otherwise harmonious and very well-run development.
The block in question had a residents management company (RMC) in place and the RMC also owned the freehold.
As with most RMCs, managing cash flow was crucial, particularly with a major refurbishment required for the lift.
One leaseholder persistently refused to pay both his regular service charge and the additional major works lift contribution. The arrears were totalling over £10,000 and creating a substantial hole in the block management funds.
Unsurprisingly the RMC directors were placing considerable pressure on the managing agent to recover the arrears, as they were fed up of subbing the non-paying leaseholder.
The managing agent had carried out the major works consultant process correctly and there were no grounds for non-payment but they couldn’t secure payment from the leaseholder.
The managing agent turned to Brady Solicitors for a solution.
Brady Solicitors worked closely with the managing agent and the RMC directors to bring a claim against the leaseholder in the First-tier Tribunal, where he was found to be liable to pay the arrears and legal costs.
Our next step was to enforce the FTT determination to ensure that these arrears and costs would actually be paid. The leaseholder responded quickly and we were able to secure for our client a swift payment.
This relatively straightforward case highlights how, even when management of a block is good, a disruptive leaseholder can take up significant amounts of time, effort and – potentially – cost.
Through our firm and decisive action against the defaulting leaseholder the managing agent is now able to concentrate their attention on managing the block. And the RMC directors can be confident that cash flow is restored.
For help with tackling your service charge recovery challenges, contact the property management specialists at Brady Solicitors.
