My block of flats has recently acquired the freehold and we have opted to self manage. We are having difficulty with a resident who has defaulted service charge payments. At the last block residents meeting, it was suggested we take legal action, would this be costly?
Paying service charge is usually one of the leaseholder's obligations set out in the lease, so when they bought their lease they chose to buy the property, and should have been advised on the lease and effectively promised to abide by the leaseholder's covenants.
Taking legal action should be a last resort. Not only does it mean investing property money from the service charge pot, but also can be distressing and can be uncomfortable, particularly if you are both residents.
Some firms of lawyers will write arrears letters, or letters before action, for around £40-£50 + VAT. If previous threats and letters did get anywhere, maybe a legal letter will do the trick. A letter before action, need not be from a lawyer but is necessary to comply with the Civil Procedure Rules. It is hoped that a letter before action gets a response or any dispute cited at least then you can consider the merits of your case before proceeding.
Legal action need not be costly as using the County Court small claims track, generally suitable cases up to £5,000, each party remains responsible for their own costs. It will depend on the lease as to whether the costs of administration may become recoverable under the lease as costs in contemplation of Section 146 Action which are usually provided under the lease.
Mary-Anne Bowring, Founding Director of
Ringley Chartered Surveyors and creator of
(Weekly, fortnightly or monthly)