Service charge help

MattP1

We live in a freehold property on a new build estate that have a service charge of around £300 per year. This charge is mainly for the up keep of our communal private parking area. We pay our bill every year however there are people on our estate who refuse to. We have our bill at the end of every year and part of!2019's bill was £46 towards debt revovery costs. This for other residents debts not ours. I refused to pay this but they have done the same thing for!2020.!How is it fair that we have to pay for other peoples deby recovery costs? HLM Management state they can not target one individual and have spread the cost. Any advice on where we stand legally would be greatly appreciated.!

missile

Legally you are liable, check your title deeds.

Have you asked agent why they cannot pursue this and recover service charge and costs from the owner(s) who doesn't pay?

What does it say about recovering bad debt in your agents contract?

Have you discussed this issue with your neighbours?

Do you have an owners committee. If not form one. :A

davidmcn

The whole principle behind these set-ups is that the residents pay for everything. There isn't a third party who is going to reach into their pockets to subsidise the debt recovery costs, so everybody else pays for your recalcitrant neighbours.

I expect there are means of the managing agents recovering the costs, if nothing else, when the "debtor" house is next sold.

MattP1

Hi. Thanks for your response. All of my immediate neighbours pay in full and are equally unhappy about it. I did check all of our legal documents and it doesnt state anything in them about debt recovery costs of non paying residents being passed to others. I really dont know where we stand with the law on this..

eddddy

MattP1 wrote: »

Hi. Thanks for your response. All of my immediate neighbours pay in full and are equally unhappy about it. I did check all of our legal documents and it doesnt state anything in them about debt recovery costs of non paying residents being passed to others. I really dont know where we stand with the law on this..

It's a contractual matter - i.e. it probably depends what it says on the 'deed of transfer' you signed when you bought the house.

(The deed of transfer would detail the charges you have to pay.)

TBH, I would have expected it to say that the 'late payer' is responsible for any resulting debt recovery costs.


I guess it could be a temporary cash flow issue. Somebody hasn't paid-up, so others have to cover the shortfall temporarily, until the money is recovered. (But you should check that the deed allows the Management company to cover temporary shortfalls in that way.)

davidmcn

eddddy wrote: »

TBH, I would have expected it to say that the 'late payer' is responsible for any resulting debt recovery costs.

I guess it could be a temporary cash flow issue. Somebody hasn't paid-up, so others have to cover the shortfall temporarily, until the money is recovered. (But you should check that the deed allows the Management company to cover temporary shortfalls in that way.)

Yes, the management company is just administering the management, they're not taking on the risk of people not paying up. The debtor is still ultimately responsible for whatever they're due, but it could be ages before anything is extracted from them.

AdrianC

That's the way debt recovery works.

The claimant pays.
If the debt is recovered, then so are the costs of recovery on top.
If it's not, then there's good money gone after bad in the attempt - but you know exactly where these debtors live, and you know they have substantial assets.

missile

MattP1 wrote: »

Hi. Thanks for your response. All of my immediate neighbours pay in full and are equally unhappy about it. I did check all of our legal documents and it doesnt state anything in them about debt recovery costs of non paying residents being passed to others. I really dont know where we stand with the law on this..

Hi,
In your Deed of Conditions it will state owners are jointly responsible for maintaining communal property, i.e. any costs incurred by the factor. In any event you are bound by common law.

A good factor will include details for debt recovery in his contract. You should ask factor for a copy of his service agreement.

Ask factor to state what he has / or will do to recover bad debt from owner. As a last resort he can put a charge on the property, so that it cannot be sold before the debt is cleared.

Be aware that owners are responsible for the costs incurred in debt recovery.