How was your February? To say that it is the shortest month of the year, I think that February 2021 managed to squeeze in quite a lot.
The month started with freezing temperatures to match the mood of a nation four-weeks into its third lockdown. Then, gradually, things have started to improve…the Six Nations began (albeit not very well for those of an English persuasion) whilst we also enjoyed Valentines Day and Pancake Day in quick succession. Towards the end of the month things really started heating up (literally, in the case of the weather) as the effect of COVID vaccines began to be reflected in the data, this enough to allow the government to announce a pathway out of lockdown and restrictions. I expect that we’ve all got the dates in mind when we will hopefully be able to go back to doing whatever it is we’ve missed out on over the past few months, whether it’s our kids going to school, being able to meet friends for a drink or just being able to give our loved ones a hug. As a perennial pessimist however, please forgive me for just keeping my fingers crossed for the time being that this isn’t all just a false dawn…
As for ourselves and our work, we’ve picked up where we left off in January with some really excellent results achieved on behalf of our clients. Notable highlights during February have included:
- Recovering payment of substantial service charges covering 4+ years across multiple properties which a previous agent had neglected to deal with;
- Obtaining payment on behalf of an RTM company in a case of an absent leaseholder and where the mortgage lender insisted upon a section 146 notice from the landlord before making payment;
- Resolving a case of service charge arrears concerning a deceased leaseholder who passed away over 10 years ago but in whose name the relevant property continues to be registered.
We have also continued to successfully recover service charges relating to waking watch costs & increased buildings insurance premiums on behalf of a client, thus mitigating any cash flow issues which might otherwise have been experienced by the residents management company concerned. Furthermore, we have resolved various other cases for clients this month as well as receiving multiple new instructions to deal with arrears both from 2020 and also which have become due since the turn of the year.
Earlier this month we also assisted a client by preparing a report on the service charge provisions within the leases at a development that they had just taken over the management of. This in itself was not significant – we are often instructed by clients to prepare such reports in order that they can ensure they are calculating and demanding service charges in accordance with the relevant leases – however the implications of the report were interesting. Our client’s client was an RTM company with no means of raising funds other than through leaseholder service charge payments. The lease however made no provision for service charges to be paid in advance, rather the expectation was that the landlord (as it was when the leases were drafted) would uphold all service charge costs for 12+ months before being reimbursed by the leaseholders. The extent to which costs could be recovered as service charges was also very minimal and it is inevitable that some costs which the RTM company will need to incur as part of its management will be unrecoverable as service charges.
Properties and developments which are affected by circumstances such as those above can be a nightmare for managing agents to deal with. However, where there is a good level of awareness of the circumstances then it is possible to proactively take action to negate the effect of the consequential issues. That is what our client and their RTM company client are now doing.
If you have any properties or developments within your portfolio for which you are keen to further understand the contractual service charge provisions then please get in touch with me and I will be more than happy to discuss the reports which we can provide in greater detail. Equally, if you have any cases of service charge / ground rent arrears with which we can assist then again please do not hesitate to contact me.
Nicholas Warren MIRPM AssocRICS
Director, Leasehold Debt Recovery
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