Over 50% of the service charge debts that we deal with at Brady Solicitors arise because the leaseholder says they didn’t receive the demand. James Wren, head of service charge recovery, explains how you can take steps to eliminate this excuse from your debtor list.

When we receive a list of service charge debtors from a managing agent client we issue the letter before action and, in most cases, the Brady Solicitors team is able to swiftly recover the service charge arrears.

For those who don’t pay at this point, we then need to ascertain why they are withholding payment – and by far the largest proportion claim that they haven’t paid because they never received the service charge demand in the first place.

Eliminate excuses and reduce your debtor list

Managing agents who are able to remove the ‘I didn’t receive it’ reason will benefit from a reduction in the number of slow payers.

Here are the Brady Solicitors top tips for making sure your service charge demands are safely delivered to the relevant leaseholders.

  • Require leaseholders to confirm a change of address in writing.
  • When notified of a change, ensure you update your files accordingly.
  • Keep details of all previous and current addresses, with the current address clearly marked.
  • When chasing a service charge debt, write to every address you have on file for a leaseholder. State which address you are treating as their current address and advise that all future demands for payment will be sent to this address unless they confirm you should use a different address.
  • Use recorded delivery or registered post to ensure you have proof that the service charge was sent. If hand delivered, ensure you record when the delivery was made.
  • Not sure which is the current address? Ask your solicitor to obtain office copies; whilst they are not conclusive they can provide useful guidance as to the correct address. If in doubt, your solicitor may be able to instruct trace agents to confirm the leaseholders’ current whereabouts, especially if you have had post returned as “gone away”.
  • Include a Section 20b Notice with your service charge accounts so that you are covered if a leaseholder challenges a service charge on the basis that it wasn’t received and is now over 18 months old.

Expert guidance on service charge procedures

For help or advice on perfecting your service charge processes, talk to the block management specialists at Brady Solicitors.

Found this Brady Solicitors property management blog post useful? You might also want to read:

How to deal with persistent service charge debtors

Section 20 major works – a guide to the notices

How to manage the big service charge demand period