How to collect service charges, electricity arrears, insurance premiums

How to collect service charges, electricity arrears, insurance premiums for commercial properties

Problem

At Quality Bailiffs we are often asked by our commercial landlords and managing agents about debt recovery issues surrounding service charges and other matters that cannot be collected by Commercial Rent Arrears Recovery (CRAR). This is usually in relation to the collection of service charges, electricity arrears and insurance premiums for commercial properties.

Solution

We have a low cost professional process that deals with this for landlords and includes the use where required for a solicitor for all none disputed cases. The process starts with a letter before action and can go all the way through to Court action and enforcement by High Court Enforcement Officers.

Process

At Quality Bailiffs we recognise that each case is unique, and a one size solution very rarely fits all cases. We therefore liaise with you over every case and work on a bespoke debt recovery solution that suits you.

We work under the Late Payment of Commercial Debts Regulations 2013 and the Late Payment of Commercial Debts (Interest) Act 1998. This allows businesses to charge business debtors interest, and reimburse the reasonable recovery costs of the creditor.

Take the first step

Take the first step to recovering the money you are owed.

Contact our Debt Recovery team for a FREE Debt review.

Stage 1 Collection

Costs

We charge you a small up front case management fee regardless of success. You would have to pay us this, but you can usually charge back to the tenant under the terms of your lease (legal charges).

We then add to the debt the following compensation under Late Payment of Commercial Debts Regulations 2013 and the Late Payment of Commercial Debts (Interest) Act 1998.

• Debts up to £999 a charge of £40 per invoice.
• Debts up to £9,999 a charge of £70 per invoice.
• Debts over £10,000 a charge of £100 per invoice.

For the initial fee we:

• Set up a file on our system.
• Add compensation and interest as the late payment of commercial debts interest act where possible.
• Send out a letter before action, or if agreed with you go straight to stage 2 action.
• If that does not illicit a response, we will make an attempt to engage with them by either telephone, email or SMS.
• If we cannot collect your debt at this stage, we will prepare a credit report, and where possible will give you a propensity score of either above or below 50% chance of successful enforcement.

The options that we will offer to you will depend on various factors such as the response from the debtor, size of the debt, type of entity, credit report, any dispute of the debt. As we are not solicitors we cannot deal with disputed claims, and we would close the file and refer you to a solicitor. We will also provide you with possible options for stage two.

Stage 2 Action

Costs

Dependent on actions taken.

We charge all the third-party costs of an action. i.e. court fee, fixed solicitor fee and 5% of the debt when we successfully recover it for you. Again you would be responsible for these fees, but you can usually charge them back to the tenant under the terms of your lease (legal charges).

Possible Actions

Site visit

When you need a doorstep collection or recovery service to find out what is going on at a property/business or need possessions or money back.

We have a national team of Agents available to do that in every location. With our online reporting system, you can be updated in real time. We can take photos of properties, assets and when required facilitate doorstep debt recovery. The visit can be used to see if they are worth litigating against. We cannot seize goods however as there is no court order.

Draw up and serve a statutory demand

For undisputed debt you may want to consider using the Insolvency Act. This basically says that if a company owes you £750 or more, or an individual owes you £5,000 or above, then they must pay you in full or come to an agreed arrangement within 21 days of having a statutory demand served upon them.

If they don’t pay after this, you could either be referred to a solicitor to issue a bankruptcy petition or winding up petition. Alternatively, you could instruct us to issue a claim in the County Court. Failing to do so they risk being made bankrupt in the case of an individual or a winding up petition issued against them in the case of a company.

Issue a claim in the County Court

We can via our panel solicitor deal with small undisputed claims by completing and filing the paperwork for you via money claims on-line and then gain a County Court Judgment.

This is done on a fixed fee basis. The cost depends on the size of the debt to complete and file the claim, plus court fees which vary upon the amount and stage of the proceedings, and a fixed solicitor fee.

Please Note. If the claim becomes disputed or goes to a hearing, you must either engage a lawyer or attend the hearing yourself. We can give quotes on court fees when required. Please email for a quote on current fees.

Once a judgment is obtained this van then be transferred to our bailiff department for enforcement. It currently costs £100 to issue to a bailiff for debts under £600, and £230.75 to issue to a bailiff for debts above £600.

Take the first step

Take the first step to recovering the money you are owed.

Contact our Debt Recovery team for a FREE Debt review.

About the author

This article was written by Andrew Coates, Authorised High Court Enforcement Officer and full member of The High Court Enforcement Officers Association, and current CEO of Quality Bailiffs.

Andy has a Level 4 diploma in High Court Enforcement, and over twenty five years of experience in the bailiff and investigation industry. He is a former governing council member of both CIVEA and ABI.

This article does not constitute receiving professional advice legal or otherwise and is meant for educational purposes only. All information is provided in good faith and is used at the user’s own risk. Enforcement Bailiffs Ltd, or its employees, are not qualified or insured to give legal advice and all clients should satisfy themselves of their own legal position before using or proceeding with any of the suggestions, strategies or procedures contained in this guide, and before instructing us.

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