Service charge arrears are the bread and butter for the Brady Solicitors recovery team but increasingly we are also asked to help recover unpaid estate rent charges.
These are charges applied to freehold property owners to cover communal costs such as gardening, exterior lighting or maintenance of parking areas.
The sums don’t tend to be huge but persistent non-payment can cause problems for the management company as there generally isn’t a slush fund to cover situations where a leaseholder doesn’t pay. Residents on the estates are increasingly working together in management companies to ensure a sense of community and ensure estate standards are maintained.
This was the situation in a recent case won by Bradys’ Emma Voce. Emma worked with the managing agent and residents’ management company to successfully pursue nearly a decade’s worth of estate rent charges across four properties on a large freehold estate in London. The properties were owned by the same person, a former director of the RMC.
All the other property owners had paid the modest rent charge without complaint, but the RMC was out of pocket to almost £5,000 because of the long-running arrears and this was impacting on the estate and testing the patience of the other residents.
We issued proceedings in the county court, to which the property owner brought a counter-claim and various applications that our client had to spend many hours reviewing. The size of the counterclaim also meant that the case tipped into the county court ‘Fast Track’, meaning that costs could be recovered by the winning party.
Preparation and tenacity pays off
Thanks to Emma’s thorough preparation with both the RMC directors and the managing agent, the judge not only ordered that the property owner pay the arrears that had accrued, but also ordered that the owner pay interest on those arrears together within 65 percent of the legal costs incurred by the RMC.
The defendant indicated that they would appeal but permission to appeal was refused at the hearing. We wait to see if there will be a formal application for permission to appeal.
Our next step will be to enforce payment of the arrears, interest and costs so the RMC and managing agent can re-balance the books and keep the communal works going.
Don’t let one bad apple spoil the estate standards for the rest. If you would like help in tackling persistent arrears, whether service charges or estate rent charges, get in touch with our award-winning team.