What Happens If I Don’t Pay?

So If I Don't Pay, My Home Will Lose Value...

What Happens If I Don't Pay My Service Charge?

There are two consequences to non-payment of service charges that should be considered carefully.  Firstly, the service charge is there for a good reason.  Areas of the development need to be maintained and services need to be provided.  The service charge fund has a dedicated bank account and the terms of all service charge accounts and industry regulation are such that it cannot go overdrawn.  Therefore if the contributing leaseholders and homeowners do not pay the service charge then the likely to result is that we will have insufficient funds to be able to continue to provide the required services to your development and in turn the services would be withdrawn and maintenance ceased until funds become available.  This is particularly important with apartment buildings where the service charge often covers the buildings insurance as non-payment could result in insurance policies ceasing and significant losses.  In addition, your home is often your biggest asset, and the prevention of service and maintenance delivery will ultimately lead to damaging the value of this asset.

Secondly, and most importantly, you have a legal obligation to pay your service charge and therefore if it is not paid this could ultimately lead to legal action being taken against you, county court judgements being issued that affect future credit ratings, and in extreme cases possibly even forfeiture of your home.  As trustees of the service charge fund, Realty have a legal obligation to ensure everyone who should pay does and whereas we can be sympathetic to genuine cases of hardship such as redundancy, situations surrounding deceased estates, and vulnerable sectors of society etc… we are obligated to implement a robust course of debt recovery action in the majority of cases.

If you do encounter genuine financial difficulties, tell us as soon as you can, as we may be able to offer a solution that avoids the matter being escalated to legal debt recovery action, which in turn is likely to incur additional legal and administrative fees.  Whereas we can sometimes permit spreading the cost or deferring payment, the total service charges owed must always be paid in full eventually as the debt can never be written off.

Further questions? Contact us.