§ Lord Jacobsasked Her Majesty's Government:
Whether, if a tenant has failed to pay a service charge of £1,000, the property on which that service charge is levied regardless of its value, could become forfeit; and, if so, whether they have any plans to change this position. [HL3339]
4WA
§ The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)Where failure to pay service charges is concerned, regardless of the amount, forefeiture cannot take place until the amount of service charge is agreed or admitted by the tenant, or has been the subject of a determination by a court, leasehold valuation tribunal or arbitral tribunal.
In practice forfeiture rarely occurs. Through the Commonhold and Leasehold Reform Act 2002, the Office of the Deputy Prime Minister is strengthening the existing legislative powers so that leaseholders will have to receive written demands for ground rent, service charges and administration charges from the landlord before exorbitant amounts can accrue and forfeiture proceedings commence. It is also intended that service and administration charges will remain outstanding for three years and be over the prescribed sum of £350 before the landlord is allowed to serve a Section 146 notice and thus commence forfeiture proceedings.