When there is an increase in arrears and delays in service charge payment, cash flow in a property can be problematic and can necessitate the obtaining of the arrears with the help of a bailiff company. However, it is necessary to understand the reasons behind non-payment and look for possible ways to minimise the occurrence of the problem in the future. Here are five possible reasons:
Poor Quality Work
If the work on the property is shoddy, the leaseholder may consider that there is negligence on the part of the landlord on his or her obligations and therefore refuse to make payments.
Concerns about the Work
Some unscrupulous landlords attempt to get money from tenants to undertake unnecessary projects on the property and request for service charge. Some of these projects should be the responsibility of the landlord and not the tenants.
Breach of the Lease Contract
Leases indicate the maximum amount that a leaseholder should pay for the service charge. In the event of overcharging, the leaseholder may dispute making the payment.
Failure to Receive the Demand
It is possible that the leaseholder has not received the demand to make the service charge payment. Therefore, delay in delivery of demand or not sending a demand can cause the delay in the service charge payment.
If the leaseholder is having financial problems, he or she may fail to raise the necessary amount for the service charge genuinely.
Most of the issues that lead to late service charge payments are a result of miscommunication between the leaseholder and landlord. Therefore, the two parties must strive to maintain communication, transparency and accountability for a good landlord-leaseholder relationship.
It is important to understand the reasons a service charge payment is coming in late. If, upon analysis, you discover that there is negligence on the part of the leaseholder, consider involving a bailiff company to collect the service charge payments on your behalf.