How to collect service charge arrears fairly and lawfully

Check the demand first

Before chasing anyone, check the original demand was valid: it must carry the company’s name and address, an address for service and the prescribed summary of rights. If it did not, send a corrected demand. Arrears on an invalid demand may not be legally due.

A fair process

1. Friendly reminder a few days after the due date. Many arrears are oversights.
2. Second reminder after 14 days, asking the leaseholder to get in touch if they are struggling.
3. Offer a payment plan where someone genuinely cannot pay at once. Record it in writing.
4. Final demand stating the amount, how it is made up and what happens next.
5. Legal route: a county court money claim, or an application to the First-tier Tribunal to decide what is payable if the amount is disputed.

Interest and admin fees

You can only charge interest or late-payment fees if the lease allows it, and they are administration charges that must be reasonable and come with their own summary of rights.

Forfeiture

Forfeiture (ending the lease) is heavily restricted. It cannot be used for small arrears, or for disputed service charges until they have been agreed or decided. In a leaseholder-owned block it also means acting against a member. Never threaten it casually; always take advice from a solicitor first. The government has proposed abolishing it for residential leases.

If the flat is let or mortgaged

Lenders often pay arrears to protect their security. A solicitor can advise on contacting the lender.