Whether or not you own your Freehold or have been given Management responsibility there will be provisions in the property Leases under which Leaseholders can be charge for the services provided. 


The method in which these charges are demanded, and at what points  each of the Leaseholders need to be consulted, are set down by law. The way in which interim charges can be claimed in advance or expenditure claimed back, is usually contained within the Lease terms and it is essential that these terms are correctly interpreted and followed.


ANNUAL BUDGETS


The items for which costs can be applied to the service charge fund are contained in the Lease terms and it is essential that the expenditure budget is detailed to reflect those items. Although a budget will always need provision for the unexpected this should be minimised by allowing for as much known expenditure as possible. Many service charge disputes are based on ambiguous budgets that are open to challenge. 


RESERVES FORECASTING


It is good practice to make long term provision for cyclic works and items such as roof replacement. This provides a fund which is contributed to by each Leaseholder during their time of owning the flat and enables major works to proceed without additional large payments at the time of works. This gives certainty to the level of service charge payable and takes away the need for retention payments pending works when properties change hands.  This should not however be an enforced savings plan and should reflect the realistic long term needs of the property.


We work with our clients to produce a Budget that will cover their short term expenditure requirements and a long term forecast that is achievable and realistic.


COLLECTION


By law Service Charges are not invoiced but Demanded and It is imperative that this is done strictly in accordance with the Lease terms. The Demands must also by law be accompanied by a statement of rights in the correct format. Many actions for non payment of service charges fail because charges have not been correctly demanded. 


We ensure that our demands are compliant both with the Lease terms and statutory requirements.  We do however make provision for payment by standing order either monthly or quarterly and for one off payments directly to your designated bank account. 



ARREARS


Payment of service charges by all Leaseholders is imperative for the smooth running of any property. If funds are not collected promptly, contractors cannot be paid and repairs cannot be carried out in a timely manner. 


We have a published arrears collection policy that is issued after 1 reminder letter. If we are contacted by the Leaseholder all attempts are made to assist in achieving a payment plan that is realistic for both parties. 


Firm action is taken where no response is received with eventual referral to the County Court. If there is a dispute which cannot be resolved application To the Leasehold Valuation Tribunal is made. With either route clear and accurate budgeting and demands are essential for successful collection.


All arrears costs are applied directly to the defaulting flat .