The lease sets out how and when ground rent and service charge must be paid. Good block management relies upon the availability of funds and so it is important to have a robust system in place for the collection of service charge and to promptly deal with any overdue amounts.

Clarke Mairs LLP are experienced in acting for landlords and managing agents in the recovery of ground rent and service charge arrears.

Most leases provide for legal costs incurred by the landlord in collecting overdue ground rent and service charge to be paid by the tenant. We will always review the provisions of the lease at the outset and, where possible, seek to recover all of your costs directly from the tenant.

Where the outstanding debt is in excess of £350, or otherwise has been outstanding for a period of 3 years, a landlord will usually have the right to commence forfeiture action under section 146 of the Law of Property Act 1925. Ultimately this process can lead to the landlord gaining possession of the property. However, in practice it is very unusual for the proceedings to reach that stage as the debt is usually paid either by the tenant or by their mortgage company.

Forfeiture is the ultimate sanction for a tenant and there are a number of restrictions on the landlord’s ability to pursue forfeiture.

THE FORFEITURE PROCESS

The forfeiture process requires the following steps:

Forfeiture Arrears Flowchart

If there is a mortgage over the property it is very common that the mortgage company will step in and make payment on behalf of the tenant to protect their security over the flat.

For further information or to discuss how we can assist you please contact Louise Ager directly on 0191 245 4740 or la@clarkemairs.com.

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