Unpaid commercial service charges

Service charges are costs payable by a tenant to the landlord to satisfy the costs the landlord may incur in providing various services and maintaining the property. If unpaid, landlords will find themselves out of pocket and this could accumulate to reach a costly figure.

The following information aims to provide a guide for landlords who may find themselves in such a position where commercial service charges have not been paid by the tenant.

FAQ

Why (or when) would someone would need this service?

A commercial landlord would require this service in order to recover unpaid service charges due from his tenant.

How does the process work/what are the steps?

It is the commercial lease which will govern the tenant’s obligation to pay the service charges.

Service charges are quite often referred to within leases as being “payable by way of rent”. If this is the case, it may be possible to instruct a bailiff to forfeit the lease, without having to issue court proceedings. It is important that a solicitor checks whether the landlord has the right to take such action prior to instructing a bailiff.

If it is not possible to instruct a bailiff or if the landlord does not wish to proceed in this manner, then it should still be possible to issue court proceedings to seek to obtain a court order in respect of the unpaid service charges. Once a judgment has been obtained, it can be enforced in a variety of different ways.

How long does it take?

We will usually be able to instruct a bailiff on your behalf within a matter of days.

Alternatively, if court proceedings are issued, the normal time period by when contested proceedings will reach trial is between 12 to 18 months. However the vast majority of cases do not reach trial but settle beforehand on terms negotiated between the parties.

Is it expensive?/what are the likely costs?

At the outset of our instructions we will provide you with an estimate of costs which will be dependent on which route you wish to take to enforce the unpaid service charges.

What are the things people should consider before calling?

It would be helpful to have to hand a copy of the lease and copies of the unpaid service charge demands that have been served on the tenant when you contact us.