Credit Control - Easy steps
Credit Control – Easy steps
Effective Credit Control
You should follow the steps below to ensure you have a smooth credit control process in place.
- Ensure that invoices are correctly issued to avoid any delay. If an invoice is issued incorrectly and has to be re-sent a further 30 days must be allowed for payment.
- Ensure that the terms of the lease are checked for service provisions to ensure that the invoice is correctly served. For example, has the invoice been sent via recorded delivery if this is a requirement of the lease? If the lease is silent upon the point then best practice would mean that all invoices are served first class and, preferably, by registered post.
- Although you are not legally obliged to issue reminders, it is good practice to do so.
- When 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 Charges – Summary of Tenant’s Rights and Obligations should accompany the reminder.
- When sending reminders, a gap of approximately 7 days should be left between each one (if more than one is sent). It is also a good idea, 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, the leaseholder, will be liable for any costs incurred. You should 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 i.e. a request for invoices to be sent to the leaseholder’s email address, then the leaseholder must be made aware of this.
- Once solicitors are instructed, no payments should be accepted in respect of the debt in question, as this may prejudice your position (e.g. by waiving your right to forfeit the lease) which may result in you incurring unnecessary legal costs.
Caution over clause claiming to vary fixed apportionments of service charge in a lease
It is fairly common for leases to permit the landlord or management company to vary...