Thank you Law.
I appreciate this may be a complicated matter and probably one that maybe covered by more than one area of law.
just for a bit of background I can add that I am the service provider and have many housing developments where I provide, fully, the management service. we have the option as the provider to take individual actions against a non paying homeowner but in a court where not all expenses are awarded and the excess is spread equally among all residents including those who have honoured their paying obligations.
In this case, I have been asked by one paying homeowner, who is in process of selling their property and is aware of one or two homeowners who have not paid their share for 3 years. technically we could take an action but now does not suit us. the issue the homeowner has is that any level of difficult non paying homeowners on a development might compromise the house sale and its full potential value. alex
I am of the opinion that the paying residents can bring an actionagainst the management company for failing to provide an adequate level ofservice which must be the case because they have not got enough money to do it!
It would spread the risk if all the service charge paying residentscontributed towards the legal costs.
There is no cause of action from one resident to another inrespect of non-payment of service charge as there would be in respect ofnuisance or a breach of covenant which may affect or the residents
Does that answer the question? Can I assist further?
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I terms of answering the question it does not quite as the implications of paying resident taking action against service provider is contrary to the objectives here and an impractical approach, especially if the land has not been maintained. the resident is trying to establish if it is more financially effective to take action against a non payer or to wait until the service provider deems it is appropriate, such as at a house sale and requirement use of inhibitions and certificate of completion.
however, the point about one resident taking an action against another resident appears difficult so it does seem you have answered this point.
I don't think that for the purposes of your question, the resident has a cause of action against the other resident.
If the other resident was causing noise, or nuisance or leaving things in the hallway or dog poo all over the grass , I think the resident can sue the other resident.
However the liability for the resident to pay service charge is a liability under the lease of the individual to the management company .
I think that any liability between residents with regard to service charge is too remote unless the paying resident can prove some kind of loss .
I think that virtually impossible.
however there is no reason that the resident cannot sue the non paying resident and let the court decide the issue. it is not a particularly good claim in my opinion but that does not necessarily mean that it will not win if it gets to court sometimes the hundred to 1 outsider wins
I am tempted to say I kind of knew that but your opinion is welcomed and I can advise resident accordingly.
in meantime back to action against non payment......frustrating sometimes after all the excuses.
For many years I was director of an engineering company.
We started using a particular supplier whose service and priceswere amazing. We got the usual 30 days net monthly account and one month, wedidn't pay for no particular reason.
7 days after the money was due we got a snotty letter threateningsolicitors and we put it in the month-end pile. It was one of those we will getround to it jobs. It was not for a particularly high sum of money, lowhundreds.
Seven days later we got a solicitors letter that went in the monththen pile and seven days later the court summons arrived on the desk.
We paid the same day.
We carried on using them for years afterwards and we always paidon time. There is a moral there.
If you continue to chase the reluctant freeholders, they willcontinue to fob you off. It is worth checking the lease because you may be ableto instruct solicitors and add a late payment charges and solicitors costs ontothe service charge. If the lease allows for it (many do) you can still getsolicitors back under the terms of the lease even if you sue them in the SmallClaims Court
They will need consent from the freeholder if ever they come toremortgage, or sell and you will have to confirm that all the service chargesare up-to-date. Even if you don't get the money now therefore you can hold themto ransom at some stage.
I have been on the receiving end of it in the past with clients toknow how it works.
It depends if you need the money now to do the work