By far the most common “reasons” (that in reality lack merit) which are given by property owners for late or non-payment of service charges and ground rent are:-

• “I didn’t receive the demand” (i.e. “you can’t have sent it” or “I have moved and you haven’t written to my new address”);

• “I received the demand but I had no reminders and so didn’t realise I had to pay now”; 

• “The demand is not correctly addressed”.

For the purposes of this update we are focusing on the above common excuses and ignoring the also very popular:-

• “The landlord/managing agent does nothing at all that I should have to pay for”;

• “I don’t live there so I don’t have to pay - charge my tenant”;

• “I dispute everything”, etc.

The first three “reasons” that all relate to service of the demand can generally be dealt with promptly where the landlord or managing agent has good internal systems and records.  The following are tips on what, ideally, you should have in place to quash the property owner’s claim of non service at an early stage.

1.       The ‘address for service’ - With every demand run, service of accounts or other notices (Section 20 etc) your covering letters should include the following:-

• A statement confirming what address you are currently treating as the property owner’s ‘address for service’ and that all demands notices etc will be served at that address, in the absence of contrary notification;

• That the property owner should notify you in writing should they wish you to use an alternative address for service. To encourage a response, your letter could provide to the property owner an email address to which such notification should be sent.

2.       Change of the ‘address for service’ - Where you are contacted by a property owner to notify you of a change of address for service, always insist that such notification MUST be made in writing.  An email should suffice, or a letter written by the property owner with a clear record of when the request was received by you and the specific address provided. There can then be no suggestion of a mistake by the landlord or managing agent if the postcode or house number is then found to be incorrect.  

3.       Email - Always ask the property owner to provide an email address (we all have them now).  Sending demands and notices by email will not necessarily amount to good service and thus should always be secondary to sending by post to the last notified postal address. However, a property owner will likely see the email and in any event be unlikely to argue that they had not seen it or have had the opportunity to see, should they wish to try to rely on non service as a reason for non-payment. 

4.       Use all addresses  - When sending chasing correspondence, always write to ALL addresses that you have for the property owner, including email addresses.  Also always include with that chasing letter a copy of the actual demand and relevant summary of rights and obligations.

5.       Do your homework - When inheriting a development from a previous agent always:

• Double check the accuracy of the addresses they provide. We frequently see incorrect house numbers and postcodes which can cause delays in recovery and enforcement.

• Obtain up to date office copies of each title on the managed development from the Land Registry and cross check that against the records passed to you from the former agent.  Any anomalies should result in contact being made with the property owner to clarify, correct and update the information held.

• Within your “Introduction” letter to property owners, include confirmation of all contact details held for the property owner and invite them to respond to correct any errors that they find.

6.       Land Registry checks - Obtaining up to date office copies of the property owner’s title from the Land Registry is also a good way of finding other addresses for the property owner if correspondence sent to the service address on your file is ever returned undelivered.  Whilst the address for service should remain that which was last notified to you by the property owner, you can at least seek to contact them at any other address on the registered title with a view to asking the owner to update you as to their current correct details if necessary.

7.       Good record keeping - Where possible, keep accurate records of all changes of address made and when such a request was received and actioned by you.

8.       Section 20B Notices - Finally, and as an aside to the above, it is always worth including a Section 20B Notice for the full balance of charges in the relevant financial period when you serve the annual accounts on the property owner. This will minimise the possibility of an argument of non service by the property owner if, during the preceding period, there may have been genuine issues with the delivery of interim service charge demands.  It is not a fail safe but it can only assist your client and is easily done if your systems are set up to produce the Section 20B Notice automatically with the letter serving accounts. 

Your system probably already deals with some of the above points but possibly not all of them. 

As always, if you have questions regarding service or perhaps “reasons” that you have been given by a property owner for non-payment, then do please fell free to contact us on 01435 897297 or at info@kdllaw.com for further advice.

Disclaimer

This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole. 

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