Persistency prevails to recover large service charge debt

A long standing Brady Solicitors client in North London was struggling to even get a response from a leaseholder who had substantial service charge arrears, amounting to over £20,000, which led to them instructing us to act on their behalf.

The Managing Agent very rarely uses solicitors for service charge issues and has a very close relationship with their leaseholders. However this non-payment was causing substantial issues with roof maintenance at a picturesque Mansion Block in Hampstead. The freehold owing Management Company wanted results and the Agent was under a lot of pressure from the client to provide solutions.

Bradys went through focused debt collecting processes issuing a Letter before Action, and then moving on to issue court proceedings to obtain a judgement in default, as the leaseholder remained unresponsive to all efforts to communicate with them. We also found that the leaseholder had been using a variety of companies to avoid service charge liability and there were some questions around ownership. Throughout this we also ensured the mortgage provider for the property was aware of proceedings, so they had the opportunity to step in at any stage should they wish to do so.

Adapting the approach to reach a resolution

Having been unable to make any progress we began the forfeiture process. However, at this stage a member of our team noticed that our client had made an error within their service charge demand. Fortunately this had been corrected by the Bradys’ Letter before Action, but we still needed to ensure the lender would step in. The lender was slow and the estate needed the funds urgently so we raised a complaint with the lender to push the process forwards. We contacted the lender regularly outlining the impact of their clients non payment and the effect on the block and eventually payment was forthcoming.

The Head of Block Management at the Managing Agent commented:

“This block is a key client and the Management Company Directors require an exceptional service. Due to the age and complexity of the block, repairs can be expensive and we need to ensure the the service charge funds are there to deliver the projects. Bradys are a key partner when we need service charge arrears support.”

Having recovered the arrears in full to restore the client’s service charge budget all at no cost to the Managing Agent or Management Company. We then advised them on how to amend their service charge demands to avoid the Managing Agent facing the same issues in the future and ensuring demands are correct for all leaseholders.

For expert advice and support dealing with a tricky leaseholder or recovering service charge arrears that is affecting maintenance on a block you manage, please do get in touch.

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With hundreds of years’ worth of combined experience, our experts have dealt with nearly every leasehold property matter you can imagine. If you’re currently in need of legal support or advice, please get in touch.

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