This page contains a Flash digital edition of a book.
tOUGHLOVe IsNEEDED


“Hesaw her in thelobby;hefelt hisfaceblaze and histhroatgodry;heaverted hiseyes although she stared directly- brazenly, even – into his. He had to get out of there and quickly.”


Is thIs the fIrst fewlInes of the newMills and Boon romance? No - just a descriptionofhowmostRMCdirectors feel when they bumpinto afellowresident who has persistent service charge arrears: an acknowledgment of the awkwardness of writing to neighbours to chaseand thesense of infuriationthat produceswhen those demands, letters and reminders are ignored. How, then,can this situationbe


avoided – and more to the point – howcan thearrears bemanaged and prevented entirely? It allstartswithastrictcredit


controlprocedure.Whether you administer this ‘in-house’ or outsourceit,make sure that it is organised and that your automated systemhas allthe correctinformation aboutthe leaseholders.You will need to know: ndate andfrequency of the payments; nthedateofissueofthe demand and due date; nlatest correspondence addresses -if they do not reside at the property; nthe correct contribution percentage for each flat; and nthelandlord’suptodateaddress for service in England andWales. Nowthatthe economyisatbest


sluggish, it is moreimportant than ever to exercise astrictcreditcontrol system whichwillresultintimelycollection andprompt action on defaulters –azero toleranceapproach,ifyou will.Mills andBoonmay peddlesentimentality butthere is no placefor that in the business ofmanaging your building. So ensure your demandsare correct andcompliant with statute(ie, that they stipulate the landlord’s address for the purposes of s47 of the Landlord and


Flat Living Spring2012


WhenalIttlE


slCsolICItors explains howRMCs can tighten up on service charge arrears collection


Tenant Act 1987 and have attached to themthe latest versionof the summaries of Tenants’ Rights andObligations).Stick to thedeadlines set for reminders and knowwhen to drawthe line. By that,wemeanthatyou should operate a policywhere if initial demands and reminders (no more than two) continue to be ignored then youshould notenter anyfurther dialogue or correspondence with the leaseholderbut should instruct solicitors straightaway.Very


FINANCE Advice oftenyourlease will providethatlegal


fees forrecoveringarrears or taking action in contemplationofforfeiturewill bemet by the leaseholder, so the fear of incurring legal fees ought not to be a bar to instructingsolicitors.


As directorsofthemanagement companyyou cannot afford to allow arrearstobuildup, asRMCs know only toowellthatthe lack of payments has an adverseeffect by reducing or stalling the levelofservices youcan provide. This has the knock-on effectofdecreasingthe building’s valueand ultimately reducing theequityof allleaseholders.You have adutytoall those leaseholderswhodopay theirservice charges on timeto pursue arrears, so ending the downward spiral.


Decidingtopursueenforcement through


courtactioncould beoneofyourbetter decisions:most leaseholdershaveamortgage lenderandthethreat of courtactionresultingin forfeiture oftenmeans that thelenderwillsettle theleaseholder’sarrears (andsimply add thedebt to theleaseholder’sborrowingfortheremainder of themortgage term). Forfeiture is themost useful tool to secure paymentofdebtwhere the arrearsamount tomore than£350 orhave been outstanding fornofewer thanthree years. Even if theleaseholderhas nomortgage


(and, indeed,evenifthere wereamortgage) youcan always pursueamoney judgement against the leaseholder. Before you do so youmay wish to ascertainwhetherthe leaseholdercannotpay orwhetherhe just will notpay.Thiscan be done by obtainingastatusreportfrom aTracing Agencywhichwillrevealbankruptcy, previousCountyCourt Judgements andmatters as variedaswhether the leaseholderisincurrentemployment or howmanycharges he has over the property.Ifyou arehavingtrouble tracking downyour leaseholder then theTracing Agencies can help with that too. Alternatively, youmay consider applying to


result in timely collection...


controlsystem whichwill


astrictcredit


...it ismore important than ever to exercise


courtfor an oral examination of the leaseholderwhich obligeshim to attend to answerquestions about hisfinancialpositiononoath. If theresults of either exercise reveal theleaseholdertobea“won’tpay” andworth pursuing, then it could bemoney well spent. In theevent that he is revealed to be a “can’t


pay” then it will have prevented money beingwastedinfutile


enforcement action. If it is generallyaccepted that the


RMCwillpursueamatterthrough to itsconclusion–including taking enforcement action against debtors - then this couldact as adeterrent to late payerswhich, in turn,willmeanan overallimprovement in collection rates and a better platform for delivery of vitalmanagementservices. There-now doesn’tthatmakeyou feel loved up?●


Janwoodland is the Head of Property at SLC Solicitors


27


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68