Credit control – easy steps
Follow the steps below to ensure a smooth credit control process is in place:
- Ensure that invoice is correctly issued to avoid any delay. If the invoice is incorrect and has to be re-sent a further 30 days will need to be allowed for payment.
- Ensure that the terms of the lease are checked for service provisions to ensure that the invoice is correctly served in accordance with the provisions in the lease. For example has it been sent via recorded delivery if the lease requires this? If the lease is silent upon the point then best practice would mean that all invoices are served first class and, preferably, by registered delivery post.
- Although not legally obliged to issue reminders, it is good practice to do so.
- If sending reminders, there is a statutory entitlement to add a reasonable administration charge for this but the leaseholder should always be made aware of this and a copy of the Administration Charge Summary of Tenant’s Rights and Obligations should accompany the reminder.
- If sending reminders, a gap of approximately 7 days should be left in between each one (if more than one is sent). It is a good idea also, in the final reminder, to inform the leaseholder that if payment is not received by a specific deadline the matter will be referred to solicitors and they will be liable for any costs incurred – also confirm the amount of any ‘referral fee’ that will be added to the sums due. Should a leaseholder request that their invoice is issued in a way the system cannot cope with, or is in contravention of company policy – (e.g. a request for invoices to be sent to the leaseholder’s email address) then the leaseholder must be made aware of this?
To ensure a smooth transition when referring your debt recovery cases to solicitors then follow these steps:
- If this is the first time a particular site/block has been referred to solicitors you will need to send a copy of the Lease. If you do not have a copy of this, it can be obtained from the Land Registry for a small cost. The solicitors will then be able to check the salient terms of the lease to ascertain the interest rate applicable on arrears; triggers for forfeiture and the position on recovery of legal costs etc.
- The address of the property in arrears should be sent, along with details of any other correspondence address held for the leaseholder.
- A breakdown of the charges outstanding and the periods to which the charges relate should be sent and, if possible a copy invoice or statement.
- If you hold a copy of the Land Registry title document it is a good idea to forward this too as often there is need to check the superior title to check the ability of the party claiming arrears to collect
- If any dispute has been raised by the leaseholder and responded to prior to referral it is vital to forward details of this.
Once a matter has been referred to solicitors you do not need to correspond with the leaseholder regarding any queries or disputes. You should refer them back to the solicitors and they will liaise with them on your behalf.
We would also suggest that once solicitors are instructed no payments should be accepted in respect of the debt in question before you have checked with them as this may prejudice your position (e.g. by waiving your right to forfeit the lease) and open you up to incurring unnecessary legal costs. Similarly, if any payments are received that you are unable to return it is important that you notify the solicitors of this as soon as possible, Failure to notify them may result in incorrect actions being taken and further legal costs being incurred, for which you may be liable.
Instructions will be sought from you so it is a good idea to appoint a designated person within your company to whom any queries can be sent. It can be frustrating when a leaseholder raises a dispute as this can create a delay in funds being obtained. However all disputes do need to be dealt with once they are raised in order to ensure that your position is fully protected if court proceedings are required – so having one designated person to deal with the matter is the preferred way to proceed.
If you are notified that a property has been repossessed or is being sold whilst the debt recovery matter is with solicitors you should notify them of this as soon as possible. they will then be able to collect the arrears on your behalf.
At all times you should able to ring the solicitors for updates on the matter and (if they operate such a system) log on to their reporting systems for updates from your own pc, tablet or mobile device or alternatively receive weekly or monthly reports from them to keep you up to date with the progress on your case.
Please contact SLC Solicitors on 0333 0 300 200 email at firstname.lastname@example.org.