As the lease will require the leaseholder to pay the service charge in full, failure to do so is likely to be regarded by the landlord as a breach of the lease. If a leaseholder is having difficulty paying service charges the first step is to contact the landlord or manager to try to make an arrangement.
If a leaseholder does not keep to an agreed payment arrangement or fails to keep in contact with the landlord or manager to try to resolve the arrears problems, they may find that one of the following enforcement options is taken for recovery of the debt:
Contacting the leaseholder’s mortgage lender.
Civil action, such as a small claims action or a county court judgement.
Forfeiture, although this is a complex procedure and relatively difficult for the landlord to achieve.
Many leases will allow the landlord to make charges in respect of late payment and legislation now allows a reasonable administration charge to be made even if the lease does not specify this. The lease may also allow the landlord to charge interest on the outstanding service charge for the period that it remains unpaid.
