Sometimes, despite the best efforts of property managers, service charge arrears continue to be a problem in blocks where property owners find themselves in financial difficulties, or they are simply unwilling to pay.
In cases where demand letters are ignored and payment deadlines missed there is often no option other than to take matters to the county court. Unfortunately, as we have established, there may be cases where this process becomes an expensive and lengthy process.
The first thing to be prepared for when you take a leaseholder to court over unpaid service charges is referral to the First Tier Tribunal (Property Chamber) (FTT) in England, or the Leasehold Valuation Tribunal (LVT) in Wales.
This in itself will mean lengthy delays when a case goes from a tribunal to the county court. Fortunately, the costs of this tribunal are recoverable from the leaseholder as long as the tribunal agrees that the full amount of the debt is owing. Of course recovering the debt will also depend on the leaseholder’s ability to pay and if they subsequently declare themselves bankrupt or in financial difficulty, recovering debt may not always be possible.
The difficulties involved in recovering service charge arrears mean it is always wise to seek expert help and to fully investigate issue before they get out of hand.