A Housing Forum Good Practice Guide Sustainable Leasehold and Long-term Asset Management 21 Many social landlords have concerns regarding affordability. The leaseholder is required by the terms of the lease to pay the service charges and ground rent. Remember, the relationship between the landlord and the leaseholder is a commercial one and should be considered as such. a leaseholder’s consent. Legal action is usually sought by seeking a county court judgment (CCJ) which may award the monies owed plus fixed costs (for claims under £5,000) and late payment interest to be paid by the defaulting leaseholder. Once a CCJ is granted by the court, a landlord’s solicitor will have a variety of options to enforce the court’s order. In most cases if there is a mortgage on the property it is likely that the mortgage provider will be given a further opportunity by the landlord’s solicitor to protect the mortgagee’s interest and pay on behalf of the leaseholder the full amount owing including the solicitor’s costs, interest, administration charges and, of course, all the arrears of service charges and ground rent. If payment still remains outstanding following the court’s determination a number of enforcement measures are available. Lack of adequate reserve funds The majority of housing associations have set up appropriate sinking funds to cover future maintenance works. However, and particularly with smaller housing associations and other social landlords who find themselves with a major repair programme to carry out, there is sometimes a lack of adequate reserve funds to pay for the works. It is likely that a loan may have to be negotiated or grants obtained. Housing associations who find themselves in this position must focus on full recovery of the cost of the works from leaseholders. Failure to maintain a property adequately Landlords may fail to recover the full costs of a repair if a leaseholder successfully claims the landlord has failed to maintain the property adequately. This is a common ground for appeal by leaseholders. The best defence is for the landlord to have a current asset management plan or strategy, with a predicted programme of repairs and replacements. The asset management plan is likely to include day-to-day repairs, planned maintenance and long-term component renewal. Having taken the appropriate professional advice and put an asset management plan in place, the landlord must adhere to it. The question of whether a landlord has failed to maintain a property is generally decided by the first-tier property tribunal, based on expert opinion. Inadequate collection processes and overgenerous payment terms Housing associations and other social landlords do not always have the best track record when collecting debts, and sometimes offer overgenerous payment terms. This may be understandable as social landlords, in general, come from a background where helping people in housing need is a priority and it is sometimes difficult for individual officers to implement collection processes from people who may well be cash poor (although asset rich). There is no simple solution to this problem except to educate officers that they must be commercial, fair, reasonable and consistent throughout.
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