Property Management - Service Charge Arrears Recovery

Brethertons have particular expertise in acting for Property Management Companies, Freeholders, Residents Management Companies and Right to Manage Companies, who instruct us to recover ground rent and service charges from lessees who default on their contractual obligations contained within a lease to pay these sums.

If we are retained to recover debts of this nature, the level of our fees will vary and will reflect the particular requirements of the dispute and any preferred course of action a customer may wish us to pursue. These fees are incurred on a fixed fee basis.  

Key Stages

The Service Charge and Ground Rent demands which have been issued by the customer to the lessee will be checked to ensure they are compliant with relevant legislation.

We will need to be supplied with and read a copy of the lease and establish to whom the obligations to pay ground rent and service charge is owed. If copy leases cannot be provided, we will need to obtain a copy from the Land Registry.

Before any action can be taken, we will also obtain Office Copy Entries from the Land Registry of the registered title to establish who the registered owners of the property are, the address for correspondence notified to the Land Registry for correspondence purposes and whether or not there is any mortgage registered against the property.

When reading the lease and title documents, we will pay particular attention to any recovery of costs clause in the lease (sometimes referred to as a Section 146 Clause), in order to ascertain who is obliged to pay the legal costs incurred in taking action. In many cases the costs for any legal action can be recovered from the defaulting lessee.

If we are instructed to pursue a County Court Claim as opposed to a Forfeiture Action or claim within the First Tier Tribunal, we will draft and send to the lessee a Pre-Action Protocol compliant letter making a demand for payment (often known as a letter before action).

If payment is not received from the lessee, we will contact the Bank/Building society (mortgagee) with whom the defaulting lessee has a mortgage.

If payment is not received from either the lessee or mortgagee, we will draft a County Court summons and issue proceedings in the County Court and ask the court to serve them on the lessee direct.

If payment is not received, we will send an application to the court and ask them to enter Judgment in Default.

Once a sealed Judgment is returned from the Court, a copy is sent to the lesee/ defendant  requesting payment within seven days and a copy is also sent to the Bank/Building society (if there is a mortgage), requesting payment.

How much will be bringing a claim cost?

As indicated above, if the lease has a clause in it which entitles the costs to be recovered from the lessees, then the costs to a customer of Brethertons would be nil as the lessee will be contractually obliged to pay them.

The average cost for pursuing an undefended County Court Claim as described above, would be £450 (inclusive of VAT).

Disbursements

Disbursements are costs related to your matter that are payable to third parties, such as:

Court Fees:

Lower LimitUpper LimitAmount
£0.00£300.00£35.00
£300.01£500.00£50.00
£500.01£1,000.00£70.00
£1,000.01£1,500.00£80.00
£1,500.01£3,000.00£115.00
£3,000.01£5,000.00£205.00
£5,000.01£10,000.00£455.00

NB Court Fees are not subject to VAT.

Land Registry Fees:

Obtaining Office Copy Entries                 £3.00 (inclusive of VAT)

Obtaining Copy of Registered Lease      £3.00 (inclusive of VAT)

How long will my matter take?

The time that it takes from taking your initial instructions to the final resolution of your matter depends largely on the stage at which individual cases are resolved.

Factors which affect time scales also include the speed at which the Court Service process applications to issue a County Court Summons and process requests to enter judgment and return the appropriate paperwork.

Typically, a case from receipt of instructions to closing a file following payment from a defaulting lessee, after obtaining a county court judgment, will take approximately 12 weeks.

Next steps

If you would like to instruct us, or to learn more about our Property Management services, please visit our key contact details. Alternatively, you can email your enquiry to us or visit our Property Management pages for further information.

Should you wish to meet our team of experienced and talented staff who would be responsible for progressing your matter then please click here.