We consider that a fair and effective debt recovery procedure is an essential element of the Core Services which we provide for homeowners.
Every homeowner should be aware that they share a financial responsibility with their co-owners to the extent that failure to meet their common charges invoices will reduce the float held for the property which in turn could compromise the proper maintenance, repair and servicing of the property and potentially put buildings insurance, if involved, at risk.
To help protect the homeowner against the depletion of the float and the negative consequences which can follow from this, we have in place a strict debt recovery procedure which operates as follows:
STEP 1:
Following issue, each common charges invoice is due for immediate payment.
STEP 2:
28 days from the date of issue, if any invoice remains outstanding a final reminder letter will be issued to pay within 7 days
STEP 3:
If the debt remains unpaid, the matter is passed to legal agents on behalf of all homeowners, with instructions to contact the debtor to confirm that they have received instructions from The Element Factors to recover outstanding common charges. Debtors still have the opportunity at this point to make settlement and avoid court action and are urged to do so. They are also advised that under certain conditions The Element Factors may be able to agree settlement by reasonable instalments. At this stage of the process, an administration fee, currently £25 plus VAT, is charged to the defaulting proprietor for the additional administration involved in the recovery of their debt.
STEP 4:
If no response or payment is forthcoming, a Notice of Court Proceedings is issued by the legal agents to the debtor and a further administration fee, currently £25 plus VAT, is charged to the defaulting proprietor for the additional administration involved in the recovery of their debt.
STEP 5:
The case is then referred to court and a decree for payment, including all expenses, sought against the defaulter. Depending on individual circumstances, further diligence may follow with associated legal costs.
With any debt, consideration will also be given to the recording of a Notice of Potential Liability for Costs against the title of the defaulter’s property. This provides a degree of security that the debt will be met in the event of a sale of the property and is a process we often implement in the interest of the homeowners collectively where the proper maintenance, repair, servicing and/or insurance of the common property is being compromised by an individual homeowner’s debt. There is a financial consideration involved in this legal process and an overall administration fee, currently £120 plus VAT is charged to the defaulter’s account where it is considered necessary to take this step.
Our Core Services include liaising with legal agents, preparing documentation and, where necessary, attending court when seeking recovery of a debt on behalf of all homeowners. No additional fee is charged for our role in this and any legal fees incurred in this process will be added to the defaulter’s debt and included in the court action.
In extreme cases, where a debt, either singular or collective, has the potential to impact, or is impacting, on our service delivery we will notify all homeowners accordingly.