What Can You Do If Your Tenant Fails To Pay The Service Charge?

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If a tenant fails to pay their service charge then this can have a huge effect on the landlord or management company, particularly if they have already incurred the costs. Therefore, it is important to take action quickly if there are arrears.

If a tenant fails to pay their service charges then the landlord or management company could:

  1. Obtain a Judgment against the tenant and enforce it in the normal way; or
  2. Seek to forfeit the lease and repossess the property.

To forfeit the lease and recover possession of the property, there must be arrears of more than £350 or the arrears must have been outstanding for more than 3 years.

Prior to the landlord serving a Section 146 Notice, they must do the following:

  1. check whether the tenant has agreed that the arrears are outstanding or a breach of the lease has occurred;
  2. if the tenant has not agreed the arrears or that there has been a breach of the lease, make an application to the Tribunal for a determination that the breach has occurred and where it relates to arrears that the sum is payable and reasonable;
  3. allow 14 days after the determination is final in case an appeal is made; and
  4. if the breach has not been resolved and either the tenant agrees the breach or the Tribunal has determined there is a breach, serve a Section 146 Notice and obtain an Order from the Court.

If you need any assistance with this or would like to discuss enforcement options then please do not hesitate to contact our Real Estate Litigation team on 0161 941 4000 or via email at lawyers@myerson.co.uk