Our recent debt recovery work for managing agents

Agreeing a payment plan to recover over eight years of service charge arrears

A debtor, who disputing her liability, had not paid service charges for over eight years. Our client had previously instructed another firm of solicitors who had been unable to recover the debt and had eventually filed a notice of discontinuance. Three years later, the case was passed to us. Our expertise, a fresh approach and a willingness to talk with the debtor meant we were able to resolve the matter using the Small Claims mediation service and didn’t have to take the matter to court. The debtor agreed a payment plan to pay all outstanding arrears and costs, and also committed to pay all current and future charges on time.

Successful recovery of service charge arrears and disputed costs

Our client, a Birmingham based managing agent, instructed us to recover arrears from a tenant who had failed to make two consecutive service charge payments. We checked the terms of the lease and, as is usually the case, the tenant had covenanted to pay the service charges and also the legal costs of recovery if he didn’t pay on time.

We wrote to the debtor and spoke with him on the telephone, and he still didn’t pay the arrears. With a debt of just under £900, this was a matter for the Small Claims Court. Approximately one month after first contacting the debtor, we issued court proceedings against him.

In response, the debtor paid the service charge arrears, but not the legal cost and filed a defence claiming he would have paid earlier if he’d known he would have to pay costs. He also said that he had tried to make payment sooner, but it had been refused.

Our client needed to decide whether to pursue the case for the recovery of the legal costs. After careful consideration, our client decided that if they didn’t pursue the matter, it could set a dangerous precedent that other leaseholders may try to exploit.

At the hearing, we narrowed the issues so that the tenant accepted that the service charges were due and payable, but he had not paid them. He tried to claim he had made an agreement with our client to defer payment of the service charges. However, under cross-examination he could not give any details to support this, and confirmed that at the time, he had been unable to make payment anyway.

Our client was granted judgment and received payment for all costs. Delighted with the financial outcome, our client was also reassured that other tenants in the development were now unlikely to try to use similar tactics in the future.

Resolving a case of repeated service charge arrears

A leaseholder had refused to pay services charges on two previous occasions. Both times he had eventually settled once the court found against him. When the leaseholder refused to pay service charges for a third time and used the same defence as before, it became obvious that this was a case of ‘won’t pay’ rather than ‘can’t pay’, which was bad news for our client.

Upon our request, the judge marked the defence ‘without merit’, effectively preventing the leaseholder from using the same defence again without serious consequences. Having found in our client’s favour, the judge ordered the leaseholder to pay the claimed amount, plus all charges, costs and interest.

A case of an unsupported debtor defence

Our client took over a development from another managing agent who had been involved in fraud. An opportunistic freeholder claimed he was in arrears because money paid to the previous managing agent wasn’t showing in his account. However, he was unable to provide the court with any supporting evidence. The judge found in our client’s favour and the debt, full costs and interest were awarded against the freeholder.

Contact a debt recovery lawyer

To find out more about how our team of debt recovery lawyers can support your business, please contact one of our specialists directly or send us an email.

Clarke Willmott has offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton. We are members of the Civil Court Users Association (CCUA) and provide service charge and ground rent arrears recovery to managing agents, management companies and landlords across the UK.