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SERVICE CHARGES Features


Leaseholders can often be left confused, misinformed and sceptical of the terms and phrasing used in correspondence which is indecipherable to them; user-friendly explanations which clearly outline where leaseholder's money is being spent increases confidence and promotes a sense of reassurance that the property manager is working on their behalf. This is especially important when determining if there has been an over or underspend, resulting in an adjustment on the account. Residents are frequently – and understandably - reluctant to part with more money than they have been invoiced for but this can be remedied by demonstrating transparency in the finances and supplying copies of budgets which explicitly outline expenditure.


Ultimately, service charge management is a


collective effort between all the parties involved. After all, maintenance can only be carried out when the funds are available to cover the costs and, in turn, residents are only compliant in contributing their share towards the costs if they have the knowledge and assurance that their money is being spent fairly and appropriately. Actively creating an environment where residents and property managers can be seen to be working together not only makes service charge collection as pain-free as possible but also results in a well maintained block that residents enjoy living in and in which the flats hold their value.


Louisa Benbow is Call Centre Manager at Property Debt Collection Ltd in Hertford


www.propertydebt.co.uk


In this situation, managing agents will be able to implement a streamlined process to ensure that the service charge is demanded correctly and in line with the lease. Enforcement if necessary, happens in a timely and no- nonsense manner. A managing agent, not being a leaseholder, is also able to remove any emotion from the situation and provide the landlord (especially where they are leaseholders) with a shield, helping them to directly avoid any difficult situations.


www.warwickestates.net


Get together to tackle service charge problems


Small blocks are most vulnerable to non- payment, as Bob Smytherman explains


As chairman of the Federation of Private Resident's Associations (FPRA) and a director of a small self-managed block of flats in Worthing for more than 20 years, Bob Smytherman is only too familiar with the problems that can be caused by non-payment of service charges.


“In a small block, one resident who won't pay their service charge can have a huge impact on the annual budget process and day to day management of a small development as overall turnover is not as high as large blocks,” he explains.


“It also can make relationships between neighbours difficult as the directors have to balance the need for confidentiality about a leaseholder's service charge account and transparency when carrying out works from the service charge. This is particularly difficult when works may need to be delayed


Issue 20


or postponed due to lack of cash paid into the account in a timely manner”.


With his FPRA hat on, Bob recommends that leaseholders get together and form a residents association to give them a strong, democratic voice to speak on behalf of their block. “The aim of the FPRA is to make this process easier,” he says. “Members have access to an organisation with more than 40 years of experience providing impartial and independent legal advice to leaseholders.


My own block has been a member for more than 10 years and our directors frequently call on the legal advisors for assistance”.


If you are having problems with service charge collection, Bob's advice is to:


Read your lease to establish how you are able to collect unpaid service charges and whether or not the costs of doing so can be recovered from the leaseholder; and


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Remember not all leases are the same and yours could impact on how you go about


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