This is a common question when residents see arrears in other properties. It is not unusual that residents feel that they are just paying for their neighbours services. While this is true and can have a detrimental effect on a development in terms of appearance and value, there are a number of avenues that can be taken to collect arrears in addition to the preferable preventative measures.
It is important to be able to distinguish between residents who cant pay and wont pay. This will also be a factor if a case goes to court. Early communication can assist greatly in preventing the escalation of arrears. Often residents who are in financial difficulty are embarrassed in having arrears and as a result ignore the problem. This needs to be dealt with in confidence and as early as possible. This results in lower arrears in combination with developing a payment plan that assists both sides.
Unfortunately, some residents may take the view that they are unwilling to pay which places increasing pressure on the residents and the management company to maintain services. If you are a lease holder in a management company, you should be aware that a resident is not entitled to withhold their service charges. Also included in the lease can be interest rates which are applied to arrears. This will depend on the lease and the management company. While the knowledge of knowing that service charges always remain due, the failure of a landlord for example to pay his/her service charge can result in higher charges to compensate until action is taken and the arrears collected.
A developer is looking to sell apartments in your complex which have outstanding service charges. The sale will not be able to go through until the service charges are paid in full.
I dont want to be subsidising my neighbour who is not paying the service charge. This is not an option as you are legally obliged to pay your service charge. The management agent is required to persue all arrears including taking court action and application of interest if applicable. This also places increased pressure on your neighbours who are still paying.
There are a number of methods to promote timely payment of arrears.
To find out more about how to manage the finances of a management company, call 012871905 or fill in the contact us form on