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Defend Service Charge Court Proceedings – A brief guide.
Who would this note help?
Buy to Let Leaseholders, any leaseholders who are letting out their properties, Owners of flats or leasehold properties residing or letting out their properties. This section covers residential properties and if you are seeking advice on how to defend a service charge claim.
What are Service Charges?
If you own a leasehold property, then it is very likely that you are liable for service charges associated with the up keep of common areas or the building in general.
Who is responsible for Service Charges?
In principle the leaseholder has the obligation under the lease to cater for any charges levied. In essence, a lease is a contract between the landlord and the leaseholder which contains certain obligations to be performed by both parties. The tenant covenants, in any lease would require the leaseholder to make regular contributions towards the service charge account.
Figures and
Facts
*Figures increase UK 2022
** Q3 2022 Civil Justice , 80 % of Civil Claims issued were money claims
***Q3 2022 Civil Justice Report compared to 2021
Who collects Service Charges and Service Charge Arrears?
The landlord would assign this responsibility to a Management company which typically would be a property management company. This company would be responsible for issuing Service Charge invoices.
Should any service charge disputes arise due to arrears or non-payment, it would probably be Management Company’s responsibility to instigate the service charge collection process, albeit these could be in compliance with instructions from the landlord.
What happens if Service Charge Arrears are not paid?
If the service charge arrears remain unpaid, then the landlord/management Company, would most probably initiate proceedings in County Court. Once the proceedings have initiated, it would be open to the leaseholder if the service charges claimed are to be contested or simply a settlement should be sought.
What shall I do if I want to defend Service Charge proceedings?
If you believe that you are not liable for Service Charges then you should immediately seek advice. The laws governing leases and service charges are not as straightforward as they seem and especially from a leaseholders point of view you would be at a disadvantage from the start if you don’t seek the necessary legal help due to the complexities involved.
What are the risks of Defending Service Charge Proceedings as a Litigant in Person?
We have seen the unfortunate situations where once faced with prospects of litigation, due to service charge arrears or litigation in court, the leaseholder perhaps for example due to a desire of saving costs, would resort to dealing with the case in a Litigant in Person capacity.Unfortunately this statistically has proven fatal for the prospects of success of many as we have heard many stories of litigants in persons usually making errors which proved fatal for their case.
Usually if you lose in court, a Costs Order follows in favour of your opponent. However it is the misconception that costs ordered in Small Claims Track i.e. a track with claims worth £10000 or less would be very limited. This is where perhaps the problem lies. The costs order will most probably be the usual costs and yes even on the small claims track.
We have seen leaseholders being charged Costs in the region of anything starting from £3000 going into five figure sums on Fast Track matters. Food for thought for those who may have misconceived, that significant costs will not be ordered in a small claims track case. In Service Charge Arrear cases it is now frequent for the Claimants to successfully argue for their costs.
Why is it Important to raise a strong Service Charge Defence?
Most of the Management companies i.e. the “agents” would employ a third party debt collection company. We hear about cases, where many letters may have been ignored by the leaseholders hoping that the debt collection company would yield. Unfortunately the gravity of situation only dawns upon our leaseholder, when an envelope from the court arrives with thick bundle of documents. We suggest that if you are faced with the scenario described and that you are required to file a defence regarding service charge dispute, then seek advice.
A solid defence raised to a service charge dispute will set you off on the right path. It will be comforting for you to learn that there various potentially strong defences, to service charge claims, however the defence and its merits have to be examined by qualified professionals. Being a litigant on person in such cases has statistically failed for many, and your opponent is usually pleased to observe mistakes being made whether they relate to a court procedure or simply in the documentation prepared.
Call us for a 30 mins Consultation today if you intend to file a defence in relation to a service charge dispute or if you intend to seek legal advice concerning a leasehold service charge matter or if you would like further guidance on the court process.
We have a full panel of legal professionals such as partner law firms, and partner barrister chambers who are at your service to support you 24/7, 365 days a year.
Our Services include assisting you with proceedings throughout your case lifecycle. Given your circumstances, certain potential defences might be available for you, but you must act soon and it is in your best interests to request assistance at the earliest.
In order to seek our guidance, please scan and upload your documents to us and we will endeavour to get back to you within 24 hours with our review of your file.
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| Review of Claim Form | ✔ | ✔* | |
| Review of Particulars of Claim | ✔* | ✔* | |
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* Provided by panel of regulated legal experts where issues concern reserved legal activity.
** Provided by our panel of Barristers