Question 1

Persistent Late Payers

Accepted Answer

Q 1: Our problem is with a persistent late payer of service charges who only pays up once solicitors get involved, after several letters and overdue notices. These notices always include a summary of rights. Is there any way that we could recoup these costs from the individual concerned without having to take the forfeiture route? FPRA Legal Expert Nick Roberts replies: I am afraid that the underlying problem here is that your lease is now rather out of date, and simply does not contain the provisions which give some incentive to leaseholders to pay promptly. A modern lease would certainly provide for interest – at say 4% or 5% over base rate - to be paid if payment is not made within, say, 14 days. It would probably also require the leaseholder to pay solicitors’ charges incurred in connection with enforcement, whether or not it was necessary for legal proceedings to be brought. If you should consider updating your leases, perhaps by an application to the First-Tier Tribunal under s.37 of the Landlord and Tenant Act 1987, then you should consider including provisions such as these. I am sorry that this may seem pessimistic but such are the problems posed by old leases. I can only advise on the law as I see it. Q 2: One of our residents has not paid their service charge for over 2 years. I have written many times and have been given assurances that it will be sorted out soon. However, it never gets sorted out and at a recent residents’ meeting the Directors agreed that we should take some form of legal action. I am not sure of the best way of going about this, whether I should go to our solicitor or go through the small claims court and if that is possible what is the likely cost. Please could you advise me on the best way to take this forward. FPRA Hon Consultant Yashmin Mistry replies: The best thing to do is probably instruct local solicitor to deal with the matter. From experience we usually find a solicitor’s letter spurs leaseholder into action. A solicitor will also need to check the service charge have been correctly demanded and in line with the lease terms. It is important this is done before proceedings are issued to avoid unnecessary costs etc. In addition, if the leaseholder has a lender, it may be possible for the solicitor to approach the lender with a view to obtaining settlement of the payment without the need to issue proceedings. Some lenders do this – others will however need a judgment.

Question 2

Persistent Late Payers

Accepted Answer

Q 1: Our problem is with a persistent late payer of service charges who only pays up once solicitors get involved, after several letters and overdue notices. These notices always include a summary of rights. Is there any way that we could recoup these costs from the individual concerned without having to take the forfeiture route? FPRA Legal Expert Nick Roberts replies: I am afraid that the underlying problem here is that your lease is now rather out of date, and simply does not contain the provisions which give some incentive to leaseholders to pay promptly. A modern lease would certainly provide for interest – at say 4% or 5% over base rate - to be paid if payment is not made within, say, 14 days. It would probably also require the leaseholder to pay solicitors’ charges incurred in connection with enforcement, whether or not it was necessary for legal proceedings to be brought. If you should consider updating your leases, perhaps by an application to the First-Tier Tribunal under s.37 of the Landlord and Tenant Act 1987, then you should consider including provisions such as these. I am sorry that this may seem pessimistic but such are the problems posed by old leases. I can only advise on the law as I see it. Q 2: One of our residents has not paid their service charge for over 2 years. I have written many times and have been given assurances that it will be sorted out soon. However, it never gets sorted out and at a recent residents’ meeting the Directors agreed that we should take some form of legal action. I am not sure of the best way of going about this, whether I should go to our solicitor or go through the small claims court and if that is possible what is the likely cost. Please could you advise me on the best way to take this forward. FPRA Hon Consultant Yashmin Mistry replies: The best thing to do is probably instruct local solicitor to deal with the matter. From experience we usually find a solicitor’s letter spurs leaseholder into action. A solicitor will also need to check the service charge have been correctly demanded and in line with the lease terms. It is important this is done before proceedings are issued to avoid unnecessary costs etc. In addition, if the leaseholder has a lender, it may be possible for the solicitor to approach the lender with a view to obtaining settlement of the payment without the need to issue proceedings. Some lenders do this – others will however need a judgment.

Persistent Late Payers

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