There may be a number of reasons why you have not settled your demand in time. This may be that as a recent purchaser of the property that you do not understand what you contribute to and why you have to contribute to the communal costs associated with managing your estate and/or apartment building.
These points should have been explained to you by your legal representative when you purchased your property. They should have informed you of the level of contributions you have contracted to as part of your purchase contract and the obligations you have committed to as part of their duties when acting for you in your property purchase.
To help you understand more about the background to the estimated service charges, please have a look at the information contained on our useful information section ‘What am I paying for?’
However, it is important to follow up on this demand promptly and settle/make arrangements to settle your service estimated charges by contacting us.
Should you find yourself in financial difficulties, it is important that you contact us promptly to discuss an instalment plan (a small additional charge does apply to arrange this) or to discuss how you can seek the assistance of your mortgage company (where applicable) to loan you the outstanding charges.
Setting up a Direct Debit instalment plan is probably the lowest cost way to settle your demand.
What happens if you do not pay on time?
If you do not settle your charges or do not agree an acceptable payment plan within 14 days of the charges falling due, you will receive a letter reminding you to pay or apply for an instalment plan as you will have breached your property’s purchase contractual terms.
If this doesn’t prompt full payment by return, then our Client will usually refer the breach of contract due to the outstanding charges, to another Company/Solicitor (recovery agent) to commence the recovery of the outstanding debt. Please be aware that if this happens then additional charges will start to be incurred and they will be added to the outstanding debt.
The following stages are not carried out by Chamonix Estates but will give you an idea of what happens if the demand is not settled on time.
Stage 1 Recovery Proceedings Commenced
Upon the Client referring a breach of contract e.g. having outstanding service charges, to a third party recovery agent such as their Company Secretary or their Solicitor, the recovery agent will usually issue a further letter demanding that the breach of contract is rectified and the associated charges settled.
This letter often includes an overview of what could happen and indication of the additional costs that might begin to be incurred if the breach of contract continues. The additional costs associated with the recovery agent receiving the instruction, reviewing the contract and then issuing this letter will be added to the charges and costs associated with the breach of contract.
If the breach is not remedied by the demand being settled in a timely fashion, then matters will move on to the next stage,
Stage 2 Court Proceedings
If the breach is not remedied within the specified time frame in stage 1, the recovery agent will draw up legal papers for the Court and then apply to the Court for a Judge to issue a judgement. A copy of the application will be issued to the individual/party that is in breach of their obligations. There is usually a significant cost for drawing up, serving and paying the Court application fees. All these costs and fees are then added to the existing outstanding amounts resulting from the breach of contract.
Should the Defendant settle before the Court hearing, they will still be liable for all the costs associated with the preparation work in Stage 2.
Stage 3 Court Hearing
Sometimes the Court will hear the case without the parties being present, relying on the parties written submissions to consider the case.
Should the case be dealt with at a Court hearing, the Client’s agent will attend the Court to answer any questions that the Judge may have. Representing their Client at Court in this type of case will result in a further costs which are typically in excess of £250 for a 30 minute hearing.
Having heard the case, the Judge will usually issue judgement in favour of the Claimant. At this point, the Judge issues a County Court Judgement (CCJ) against the Defendant. Being issued with a CCJ will usually result in the Defendant having this matter publicly recorded for all to see and will often affect their ability to obtain credit for many years after. All the costs associated with the breack of contract will then be due and must be settled within 30 days of the judgement.