Our Condominium Fee Service


In essence, the service is a two-staged approach to collecting outstanding undisputed condominium fees.

Stage 1

At the first stage (the Pre-Court action cycle) we seek to recover the debt without recourse to legal action.

Upon receipt of the Instruction Sheet and the accompanying papers, we will make a series of searches to either confirm the debtor’s address or try and trace him.

Assuming we believe we have a positive trace we will open your file on our state of the art debt collection system and we will then send a formal Solicitor’s letter of claim telling the debtor he or she has 14 days to pay failing which court proceedings will be issued. This will be followed with a text or email, if we have these details or even a phone call.

There is a small administration fee (see below) for opening the file and carrying out the searches and trace on the debtor. However, this is only charged in the event that we are successful in making a recovery from the debtor. In addition to the administration fee, we also charge a percentage of the sum recovered (see below). If we make no recovery, we write off our time and the administration charge, meaning that we will also bear the cost for any disbursements incurred in conducting the trace on the debtor.

Unfortunately, we are only able to pursue debtors through the UK Courts who are actually resident in the UK.

If you are not sure of the debtor’s UK address we can try and trace his or her whereabouts which is included in our administration fee. However, please note that to have a reasonable chance of locating the debtor we usually need a last known address and/or date of birth.

Stage 2

If no response is obtained or an offer is not acceptable, we will draft the formal court Application for a European Order for Payment. We will also draft the Particulars of Claim attaching evidence that the debtor owns their Portuguese property and a copy of the Minutes from a meeting to show the debt is due.

We will ask the condominium for the court fee to be sent electronically in pound sterling to our client account. The details of the court fees which the Court Service charge us can be seen here. When we issue a claim we ask the court to add statutory interest of 8% per annum to the debt, pursuant to the rules of court. This is discretionary but is normally ordered and added. As part of our service we will calculate the interest on the condominium’s behalf and add it to the debt.

We then have to correspond with the court to find out the progress of the claim.

If we obtain a European Order for Payment and the debtor still does not pay we will have to start enforcement proceedings. Please visit our Condominium Fee Enforcement page for more information.

We will charge the condominium a percentage of the sum recovered (see below).

‘Damages-Based Agreements’ (DBA’s).

These new regulations enable Solicitors to charge a percentage of the recoveries. To ensure that we are transparent, we include in our percentage charge the VAT rate, currently 20%. That way we hope we are a bit like Easy Jet in that there are no hidden extras!

We believe in team work so the percentage we charge is linked to the amount of work we do. Accordingly we charge a lower percentage for pre-court action work, (see below) and then if we have to apply to court for an EOP, there would be a higher rate because it involves more work especially if we have to enforce the EOP, which would also be covered under the agreement.

Under the above DBA structure we would generally not take cases on for less than €1000 as it would not be worth us doing so especially if we had to enforce the EOP as it would get very costly for us as a firm. We would however consider private fee paying agreements.

Why we charge an administration fee?

We wish to overcome situations where we attempt to contact a debtor at an old address or living abroad, or pursue debtors that have been adjudged bankrupt and therefore we perform some searches on the debtor before opening the file.

We have also found that we have to do different searches in Ireland and Scotland and that regrettably the courts there are sometimes a lot slower so we have to chase them more often which increases our work load.

Administration Charge

To enable us to offer a more efficient service we will charge the condominium a small administration charge as set out below, but only if we are able to make a recovery from the debtor. This charge will apply to each individual debtor and the amount of the charge depends on the debtor’s location.

Location of the Debtor Administration Charge (incl. vat)
England & Wales €150
Ireland, Northern Ireland & Scotland €240

This covers some of the time taken to open your file on our system, reading the instructions and the papers and making various searches which will include the following:-

i. Bankruptcy search. This is to ensure the debtor is not already bankrupt.
ii. Companies House search, which will reveal if the debtor is a director.
iii. Land Registry search, which will reveal if the debtor owns their home solely or jointly.
iv. Experian tracing searches. If the debtor has applied for any form of credit his address will usually be picked up by Experian.
v. Social Networking Sites, such as LinkedIn, Twitter and Facebook.

After all these searches, we should then have a valid address.

Please note that some agencies charge £150 plus vat for these searches alone.

Welbeck Solicitors LLP’s DBA Charges

In addition to the small administration fee we also charge a percentage of the sum recovered. In other words you pay the percentage by our results.

Amount of the Debt
(€’s)
Stage 1
Pre Action
Stage 2
European Order for Payment
& Enforcement
1,000 – 2,500 24% (including V.A.T) 42% (including V.A.T)
2,501 – 4,000 21% (including V.A.T) 36% (including V.A.T)
4,001 18% (including V.A.T) 30% (including V.A.T)

Example 1

Condominium (C) instruct Welbeck Solicitors LLP (W) for action against a debtor owing €1,800 in condominium fees.

‘W’ recovers the debt under Stage 1 after sending a letter of claim to the debtor.

The costs to ‘C’ would be 24% of €1,800 = €432 including vat plus the administration charge shown in the table above.

Example 2

Condominium (C) instruct Welbeck Solicitors LLP (W) for action against a debtor owing €2,700 in condominium fees.

‘W’ recovers the debt under Stage 2 after making an application for a European Order for Payment.

The costs to ‘C’ would be 36% of €2,700 = €972 including vat plus the administration charge shown in the table above.

However our charges can be reduced by any costs, disbursements and interest recovered from the debtor after court action.

Example 3

Condominium (C) instruct Welbeck Solicitors LLP (W) for action against a debtor (D) owing €2,700 in condominium fees.

C pays W the court fee of £95.

‘W’ recovers the debt under Stage 2 after making an application for a European Order for Payment.

W also recovers costs and interest from D of €572 and the court fee of £95.

The costs to ‘C’ would be 36% of €2,700 = €972 including vat less the €572 recovered from D so C only pays €400 including V.A.T plus the administration charge shown in the table above.

We believe that these charges are fair given the work we know that is involved especially where there are old debts which are often much more difficult to collect. As one of clients said to us 72% of something is better than 100% of nothing, especially if the charges are reduced by the sum recovered!

The above examples do not include the administration charges, which would depend on the debtor’s location and is recovered as a first charge.

Proceso Monitorio.

As you may already know, usually an Advogadas in Portugal would charge between €300 and €350 to obtain the initial judgment. However, to obtain and enforce an ‘embargo’ would cost over €1.500 in legal costs, disbursements and auctioneers fees.

In many cases the owner of the property is British and therefore, the entire Portuguese legal process is not very effective as the courts are sometimes unable to confirm the debtor’s address. As a recovery method this is very unsatisfactory because the Advogadas will not usually be able to enforce the judgment in the same way as we can in the UK.

However, if you have obtained a Portuguese judgment against a UK debtor, we may be able to assist the condominium with registering and enforcing the judgment in the UK. In doing so, we are generally able to include our fee in the application to the Court and recover this from the debtor. If you have any judgments against UK debtors, we ask that you provide copies of the judgments with the Instruction Sheet.

In some instances you may prefer to instruct us on a private hourly basis. We can provide you with details of our costs, with our hourly charge out rates starting at £200 plus vat and disbursements.

Conclusion.

We believe that if you have debtors who are resident in the UK, the condominium will have a better chance of making a recovery by using our services. We say this because:-

  1. We are based in London.
  2. We are specialist Solicitors
  3. The proceedings we use in the UK are generally much quicker than in Portugal.
  4. We enforce in the UK which is usually easier and quicker.

How do we take things forward?

If you wish to instruct us, our Instruction Sheet needs to be fully completed and sent back to us.

In the event that there are several debtors, an Instruction Sheet will need to be completed for each of the debtors and will need to be signed by an Administrator, or authorised signatory and returned to us. If you are an existing client with bulk instructions we may send you an excel spreadsheet for completion.

Legal Stuff.

Please note that the above is an executive summary and our terms of service is available online. Our client care letter and damages-based agreement will be sent to you when we receive your Instruction Sheet and have conducted a successful trace on the debtor and we ask that you read these documents carefully.

Please note that if proceedings have commenced in Portugal (but a judgement has not been entered) and are ongoing, we cannot always pursue the case in the UK court and that you should notify us of this at the time of instructing us. We can discuss this with you, as we are usually still able to act at Stage 1.