Collecting unpaid service charges.
In short
First check the demand was valid: without the summary of rights, the landlord's name and address, or within the 18 month rule, the money may not yet be payable. Then remind, talk and agree a plan. If it stays unpaid, the company can bring a money claim, and either side can ask the First-tier Tribunal whether a charge is payable. Forfeiting the lease is heavily restricted and rarely the right answer.
Is the money actually due?
Only if the demand was made properly. A leaseholder may withhold payment until the summary of tenants' rights and obligations is sent with the demand, and the charge is treated as not due until the landlord's name and address and an address for notices are given. A cost incurred more than 18 months before it was demanded, with no written notice in time, generally cannot be recovered at all.
What should the first steps be?
A plain reminder, then a phone call or a letter from a director, before anything formal. Many arrears are a missed payment, a change of address or a dispute about one item. Offer a payment plan and put it in writing. If a leaseholder says anything that suggests they are in crisis, stop chasing, speak to them as a person, and point them to Samaritans on 116 123, or 999 in an emergency.
Who decides whether a charge is payable?
The First-tier Tribunal (Property Chamber), under section 27A of the Landlord and Tenant Act 1985, can decide whether a service charge is payable and, if so, how much, by whom and when. Either the company or the leaseholder can apply. Where the dispute is about the amount rather than simply non-payment, the tribunal is usually the right place.
Can we take them to court?
Yes, for a debt that is not disputed: a money claim in the county court. Follow the pre-action steps first, with a clear letter setting out what is owed and why, and a reasonable time to pay. If the leaseholder disputes whether it is payable, the court may send that question to the tribunal.
Can we forfeit the lease?
Only in narrow circumstances. Section 81 of the Housing Act 1996 prevents forfeiture for an unpaid service charge unless the amount has been finally determined as payable or the leaseholder has admitted it, and section 167 of the Commonhold and Leasehold Reform Act 2002 restricts it for small or recent arrears. It is a drastic step with its own procedure: take advice before even mentioning it.
Can we add interest or charges?
Only if the lease allows it. Charges for late payment are administration charges, which must be reasonable under Schedule 11 to the 2002 Act, and the leaseholder can challenge them at the tribunal.
Where Servanda comes in
Servanda will not issue a demand that misses a required item, so the first question is answered before the money is ever late. Who owes what shows every flat's balance and how old it is, and a reminder is one button, never automatic, and refused while a flat has an unread welfare concern.
Manage your own block or estateThe law
- Landlord and Tenant Act 1985, section 21B
- Landlord and Tenant Act 1987, section 47
- Landlord and Tenant Act 1987, section 48
- Landlord and Tenant Act 1985, section 20B
- Landlord and Tenant Act 1985, section 27A
- Housing Act 1996, section 81
- Commonhold and Leasehold Reform Act 2002, section 167
- Commonhold and Leasehold Reform Act 2002, Schedule 11 (administration charges)
The legislation is the authority; this page is a plain summary for England, checked on 2026-11-02. Wales and Scotland have their own rules. Take advice on any particular building.