Rent and Service Charge Recovery

Non-payment of rent and service charges are breaches of the lease. At first you are best to negotiate with tenants to determine if they will agree to pay.

Rent Recovery

• If the tenant’s rent is in arrears, the landlord can claim damages in court for unpaid rent. If the landlord wants to forfeit the lease, he or she can commence proceedings to do so.

Ground Rent

• The amount of ground rent, when and how it is to be paid should be stipulated in the lease.
• Ground rent of up to 6 years can be recovered by a landlord. 
• The full amount can be charged at one time. 
• The ground rent need not be paid until it is demanded by the landlord. 
• The landlord must do this via a formal, written demand. There are certain regulations that the demand must comply with.
• If a complying demand is made, the correct amount of notice given and the tenant has not responded by the due date, a money judgment can be applied for. 
• If the landlord believes the situation warrants forfeiture, he or she can begin forfeiture proceedings. This is only possible if the tenant owes more than £350 in ground rent (or a combination of ground rent, service charges and administration charges) and has been in arrears for three years or more.

Service Charge Recovery

• The services to be charged for must be contained in the lease.
• When making demands for service charges, a Service Charges Summary
• of Rights and Obligations needs to be included.
• The tenant can apply to the First-Tier Tribunal (Property Chamber – Residential Property) if they believe the service charges are unreasonable, the work has not been done to a satisfactory standard, or should not have been charged at all.
• If unsuccessful in obtaining payment, the landlord can apply to the County Court for a money judgment. If payment is not forthcoming, the Court’s enforcement methods can be used, including attachment of earnings and charging orders.
• The landlord can commence forfeiting the lease if he or she chooses.
• A Section 146 notice can be served on the tenant. Details of the breaches must be included in the notice, and the tenant must be given a “reasonable” time to pay the service charges. If the tenant does not do this, the landlord can apply for an order authorising forfeiture. You can find a discussion of forfeiture proceedings under “Breaches of Covenants and Forfeiture” on our website.

If you have tenants owing rent, ground rent or service charges, we can advise on the actions you need to take to recover money owing. We can ensure you comply with stipulated procedures to ensure your claim is dealt with timely, and all of your obligations are met.

To discuss the legalities surrounding rent and service charge recovery further, please call us on 020 8290 0333 to speak to one of our solicitors.