Service Charges Case Study: Letter of Claim

This case related to a new property development built by a local authority (LA). The property comprised of a mixture of long leasehold sales and social housing tenancies.

To assist in the management of this new block, the LA appointed a managing agent to deal with the servicing of the block and the collection of service charges for the services provided.

A large number of the flats in the block were purchased by a private company, who then sub-let the properties out. For the purposes of the service charge accounts, the company was recorded as the leaseholder liable for payment.

In total for that block, the LA was owed sums in the region of £143,000 for 52 properties where the leaseholders had failed to make payment. The largest portion of that debt, approximately £32,000, was owed by the company alone. The remaining £111,000 was owed by approximately 35 private leaseholders.

Upon receiving instructions, we channelled the work in two directions. The single leaseholder debts were dealt with by the Claims and Enforcement team using our automated services, sending out standardised letters of claim and issuing legal proceedings where the debts were not settled.

For the debt owed by the company the case was dealt with by our litigation team. A letter of claim was sent to the company seeking payment of the debt owed in respect of the portfolio of properties which the company owned. In addition, payment of the costs incurred by the LA were sought in accordance with the terms of the lease.

Payment of the full debt and costs was made immediately following the letter of claim to prevent any further action being taken.

In respect of the remaining cases which were dealt with by our bulk team, we successfully recovered over 80% of the debt and costs owed to and incurred by our client.

This case study exemplifies the range of services which J&P provides, and how those services can be tailored to the specific needs of our clients on any particular portfolio of debts, allowing us to deal with both routine instructions and complex, unique instructions in a manner that is efficient and cost effective for our clients.

Written by : Uday Patel, Partner

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