Maintaining a residential or commercial building requires rigorous financial planning and a constant flow of revenue. The service charge represents the exact apportionment of the expenses forecast for the period, including essential costs such as staff wages, security, lift maintenance, cleaning and utility bills. When arrears occur, the entire collective structure is immediately affected, as the budget generally has no profit margin or substantial reserves to cover the absence of contributions. In this scenario, arrears cease to be a mere accounting issue and become a source of instability that undermines the wellbeing and the value of all residents' property within the building.

To manage this situation effectively, communication stands out as the property manager's principal administrative tool. Rather than adopting aggressive measures as soon as a payment is late, the manager should set up clear communication channels that help the defaulter settle their debts amicably. The imbalance caused by arrears tends to generate discontent among residents who pay on time, who often pressure management for quick, forceful solutions. However, impulsive, unplanned actions can worsen conflicts and expose the building to considerable legal risk. Implementing a structured communication plan protects the finances and safeguards internal harmony.

Experience with building management shows that successfully recovering debts is directly linked to speed and discretion in the initial contact. Ignoring late payment in the hope that it will be settled spontaneously tends to prolong the arrears, making the debt harder to clear. Conversely, early communication that values respect and clarity of information significantly reduces the need for costly court proceedings. Treating arrears as a technical, impersonal process helps preserve neighbourly relations and ensures the financial sustainability the building needs to keep functioning properly.

The role of the law and the property manager's duties regarding collection

Collecting service charges is not merely an administrative option but a legal duty placed on the property manager by Brazilian law. As set out in the Civil Code, every leaseholder is obliged to contribute to collective expenses in proportion to their ideal share. Should the manager fail to act or be negligent in monitoring and collecting overdue amounts, they may be held civilly liable for losses and damages before the general meeting, since inaction directly harms residents who meet their obligations on time. Therefore, tackling arrears through formal communication processes is an essential part of the legal representation exercised by the property manager.

The 2015 Code of Civil Procedure introduced important changes that made collecting arrears easier by classifying service-charge debt as an extrajudicial enforcement instrument. This legal advance allows court collection to proceed much more quickly, dispensing with a prior fact-finding stage and allowing the defaulter to be summoned to pay the debt within three days, under threat of seizure of assets or of the property itself. However, even with this legal advantage, court action should be regarded by the building as a last resort, always giving priority to amicable negotiation through careful communication.

The law sets very clear limits on the charges that may be applied to late payments. Article 1,336 of the Civil Code provides that overdue charges are subject to agreed default interest or, in the absence of any agreement, one per cent per month, plus monetary correction and a penalty of up to two per cent of the amount owed. Precision in calculating these charges is essential in the communication sent to the defaulting resident, since any charge exceeding what the law permits can invalidate the procedure and damage the relationship between the management and the leaseholder. A legally sound approach lends authority to the management and encourages voluntary payment.

Ethical principles for avoiding humiliating collection practices

The drive to reduce arrears must go hand in hand with respect for human dignity and residents' personal rights. As a depersonalised pool of assets, the building itself does not hold objective honour in the same way as a legal entity, as settled by the case law of the Superior Court of Justice (STJ). However, each individual leaseholder holds fundamental rights that cannot be violated on account of a debt. Abusive collection practices, public exposure or any form of humiliation give rise to a duty to pay damages for emotional distress, reversing the roles of creditor and debtor before the courts.

For collection communication to be considered ethical and lawful, the property manager must use strictly private, formal channels. Sending sealed letters, notifications via institutional email or individual messages through building-management apps are practices that safeguard the confidentiality of the information. Leaking data about arrears to other residents or discussing individual debts by name at general meetings are serious management failures that can be punished by the courts. Discretion in communication is not a sign of weakness, but rather compliance with the legal principles of civility and mutual respect.

Preserving the management's institutional image depends on how each case of arrears is handled. Today's defaulter may recover financially and become a resident who pays on time again tomorrow, continuing to live alongside their neighbours daily. For this reason, using neutral, non-accusatory language avoids unnecessary personal friction and keeps the door open for quick out-of-court settlements. Firmness in collection should show through regular contact and adherence to deadlines, never through harsh language or publicly exposing any resident's late-payment situation.

Structuring a preventive, amicable communication schedule

Creating an amicable collection schedule is one of the most effective methods for organising billing routines and tackling arrears systematically. This tool consists of a pre-established timetable of communication actions that defines when and how a resident will be contacted about their financial commitments. By standardising contacts, the building removes any personal element from the process, showing that collection is a routine management activity applied equally to every resident in arrears. Structuring this communication flow reduces misunderstandings and improves the efficiency of the collective cash flow.

A well-planned collection schedule for a building should include actions divided into logical stages, ensuring the resident receives notices at strategic moments to prevent instalments from piling up unpaid. This ongoing monitoring process can be broken down as follows:

• Due-date alert stage: A reminder is sent by email or app seven days before the service charge is due, making it easier to access the invoice.

• Due-date stage: A message is sent on the due date itself, wishing the resident a good day and confirming the availability of support channels.

• First-late-payment stage: Discreet contact five days after the due date, informing the resident that no payment has been received and offering a duplicate invoice with interest and penalty calculated.

• Out-of-court negotiation stage: An invitation to an amicable conversation is sent after fifteen days of arrears, with the aim of hearing the leaseholder out and reaching a swift settlement.

Automating this workflow through dedicated management software ensures no outstanding item goes unnoticed and that communication is issued in a standardised way. As well as saving the administrative team's time, automation lends a technical character to collection, easing the sense of personal targeting that some residents may feel when contacted directly by the property manager. Consistent, preventive communication educates the community and gradually reduces arrears, strengthening the building's financial health.

Handling occasional late payment and the role of forgetfulness

Occasional late payment is characterised by isolated episodes in which a normally punctual resident fails to pay the service charge by the set due date. In most cases, this arises from temporary disorganisation, loss of the physical invoice, a delivery failure, or simple forgetfulness amid a busy daily routine. For this type of occasional defaulter, communication should be light, extremely courteous and focused on service, assuming the lapse was unintentional. The main goal is to quickly provide an updated means of payment to restore cash flow.

When drafting contact for occasional late payments, the building's management team should avoid intimidating language or rigid collection wording. The choice of words should guide the resident towards resolving the issue without causing discomfort or embarrassment. Phrases such as "we have not identified receipt of your payment" or "our records show an outstanding item for this month" are ideal, as they describe the fact in purely informative terms. This courteous approach preserves the good relationship between the resident and management, prompting the leaseholder to make payment promptly and clear the temporary arrears.

Technological efficiency plays a crucial role in quickly resolving these occasional delays. Communication should include direct links for instantly issuing a duplicate invoice or provide the Pix key for a quick transfer, already including the legal addition of a penalty of up to two per cent and calculated default interest. By making the payment process easier, management removes the bureaucratic barriers that could further delay the building's receipt of revenue. The prompt service offered to the occasional resident reinforces the management's professional standards and prevents a momentary communication slip from turning into a prolonged delay.

A strategic approach to curbing repeated, recurring late payments

The repeat defaulter presents an intermediate challenge for building management: this is the resident who frequently pays the monthly charge late, though they do eventually settle the amount weeks later along with the applicable legal charges. This recurring behaviour directly harms the planned cash flow, since the building relies on timely revenue to meet its monthly commitments without drawing on reserve funds or delaying payments to suppliers. In this case, communication needs to step up a level of firmness, aiming to make the resident aware of the consequences their systematic delays bring for the whole community.

The communication strategy for the recurring resident should focus on technical clarification and a show of closeness. The property manager or managing agent should schedule direct contact to find out whether there is some operational obstacle preventing payment on the usual due date, such as a mismatch between that date and when the resident receives their salary. If that is the issue, management can suggest solutions such as pre-scheduling the bank payment or temporarily shifting the leaseholder's payment routine. Showing willingness to help disarms resistance and repositions the building as a financial priority for the resident.

If frequent delays persist even after awareness-raising conversations, written communication should formally set out that repeated outstanding items prevent planned improvements to the building from going ahead, as well as adding to administrative costs through the constant issuing of new collection documents. It must be made clear that although default interest and the two per cent penalty are paid, systematic lateness constitutes a breach of the leaseholder's duties and may lead to stricter measures should the conduct develop into chronic arrears. A firm tone in communication shows that management is closely monitoring the punctuality of collections.

Conducting amicable negotiations in cases of prolonged arrears

Once a delay exceeds thirty days, the situation stops being an isolated incident and becomes genuine arrears with the potential to destabilise the building. At this stage, the amount owed starts to accumulate significant charges and risks snowballing, making it harder for the resident to settle in a single payment. Best communication practice for prolonged arrears is to formally invite the defaulter to an out-of-court settlement meeting, seeking an instalment agreement for the consolidated debt.

The formal notice proposing a settlement should be drafted with mathematical and legal clarity, detailing every outstanding month, the penalties applied and the interest owed under the terms of the building's regulations. Communication should stress that the building is keen to resolve the matter amicably, avoiding the case being referred to the legal department for enforcement proceedings. This amicable proposal should set a reasonable deadline, such as five to ten working days, for the resident to respond and put forward their financial counter-proposal.

During negotiations, the property manager should conduct discussions flexibly, but without giving up the legal safeguards needed to protect the building's shared assets. It is advisable to structure out-of-court settlements with clear conditions for the debt instalment plan, which can be formalised through the following essential terms:

• Signing a Debt Acknowledgement Agreement: A formal document detailing the total amount owed, the due date of each agreed instalment and the immediate legal consequences should the agreement be breached.

• Keeping upcoming charges up to date: An express requirement that the resident continue paying the ordinary monthly charges that fall due during the instalment period.

• Acceleration clause: A clause providing for the full, immediate maturity of the entire remaining balance should any instalment of the settlement agreement be missed.

• Provision for a penalty fee on breach: Application of an additional financial penalty on the remaining balance if the leaseholder breaches the commitment made.

Correctly formalising this out-of-court settlement instrument, preferably signed by two witnesses, gives it the force of an enforcement instrument, making swift court enforcement easier should it be breached. In doing so, the building demonstrates good faith and exhausts amicable channels of communication, while also protecting itself legally against further instances of arrears from that resident.

The persistent defaulter and the financial penalties under the Civil Code

The persistent defaulter is a leaseholder who makes arrears a habitual, deliberate pattern of behaviour, ignoring every attempt at contact and every amicable notice sent by management. Unlike a resident going through temporary financial difficulty, the persistent defaulter uses non-payment as a form of personal financing, taking advantage of the fact that the default penalty for late payment is capped at just two per cent per month. This irresponsible conduct places a burden on other residents and can jeopardise essential services, requiring management to adopt a firm, legally grounded stance.

To tackle this pattern of chronic arrears, Brazilian law provides for the application of the punitive penalty set out in Article 1,337 of the Civil Code. According to the law and precedents set by the Superior Court of Justice, a leaseholder who repeatedly fails to meet their duties to the building may be required to pay a penalty of up to five times their monthly contribution, regardless of any losses and damages assessed. Case law treats the persistent defaulter in the same way as a persistently non-compliant leaseholder, given the harmful impact their conduct has on the community.

Applying this heavy penalty requires the property manager to observe strict formal rigour in communication and in the decision-making process. A specific general meeting must be convened to discuss applying the penalty to the resident in question. The notice convening the meeting must be sent well in advance to everyone, including the defaulter, unequivocally guaranteeing their right to a full defence and to be heard before the vote. For the penalty to be approved and considered valid in court, it requires a favourable vote from at least three-quarters of the remaining leaseholders, excluding the defaulting unit from the quorum count. Strict compliance with this procedure ensures the legitimacy of any subsequent court collection action.

Compassionate treatment for the leaseholder facing financial hardship

There are situations in which arrears stem from serious episodes of vulnerability in a resident's life, such as involuntary job loss, the failure of their own business, serious health problems or the death of a family member who contributed to household income. In these delicate moments, conducting the conversation requires the property manager to show sensitivity, empathy and deep respect for human dignity. Communication should adopt a warm, compassionate tone, showing that the building wants to help find a way to enable the resident's financial recovery without harming the collective cash flow.

A compassionate approach begins by scheduling a private conversation, away from other residents or staff. In this meeting, the manager should practise active listening, allowing the leaseholder to explain their budget constraints and the outlook for improving their personal circumstances. Once the context of the financial crisis is understood, the building can put together instalment proposals with longer grace periods or suggest deferring secondary charges in the negotiation, provided this is duly backed by the general meeting's guidelines and the building's audit committee.

To carry out this empathetic dialogue without exposing the resident, building management can be guided by the following compassionate communication practices:

• Scheduling individual support: Holding in-person or online meetings with a dedicated agenda, ensuring full privacy for the resident to explain their financial situation.

• Jointly building payment proposals: Developing an instalment plan that respects the monthly payment capacity declared by the leaseholder in financial hardship.

• Removing interrogative language: Replacing intimidating words with welcoming terms that encourage mutual cooperation in resolving the outstanding debt.

• Keeping the entire negotiation strictly confidential: Ensuring that no information discussed during the amicable negotiation leaks to third parties or embarrasses the resident within the shared premises.

This ethical, compassionate treatment strengthens mutual trust and encourages the resident to prioritise settling their debt with the building as soon as their financial situation starts to show signs of recovery. Besides fulfilling a duty of social responsibility, compassionate management reduces the risk of serious conflict and builds a spirit of cooperation that benefits the whole community of neighbours.

STJ case law on physical restrictions and legal fees in collection

A property manager's actions in tackling arrears must strictly respect the legal limits set by the higher courts' rulings, or risk exposing the building to liability for damages. The Superior Court of Justice has firmly established that it is absolutely unlawful to bar a defaulting resident and their dependants from using shared leisure areas, such as swimming pools, playgrounds, sports courts, function rooms and gyms. The court holds that depriving residents of these leisure spaces amounts to an abuse of rights by the building and seriously violates the individual's dignity, given that the law already provides specific, robust mechanisms for the financial collection of the debt.

Restricting access to shared leisure areas as a coercive collection method has been consistently struck down by courts across the country, leading to awards of damages for emotional distress against buildings that persist with this abusive practice. The building's bylaws or internal regulations cannot override the Constitution and federal law, which means that the right to own and enjoy the property remains fully intact even where the owner is in arrears. The property manager should direct the administrative team to focus exclusively on the financial penalties permitted under the Civil Code, without resorting to physical or social punishment against the defaulting resident.

Another highly significant precedent in practice is the ruling on Special Appeal number 2,187,308/TO by the STJ, which determined that the building cannot include contractual legal fees in the court collection process against a defaulting resident. This ruling changed the administrative routine of many developments that used to pass on the full cost of hiring law firms to the defaulter in the final enforcement calculation. Under this new national precedent, the fee agreed beforehand between the building and its lawyer must be paid exclusively out of the building's general revenue, with the defaulter liable only for court costs and the fees awarded by the judge in the case.

Energy efficiency with a NewSun clean-energy subscription

While building management works to improve its communication schedule and recover overdue revenue, another essential front in tackling arrears is actively cutting the structure's fixed costs. The electricity bill for shared areas — covering the continuous running of lifts, water-pumping systems, and lighting for car parks and entrance halls — can account for as much as twenty-five per cent of a building's entire monthly budget. A NewSun clean-energy subscription, which stabilises the electricity bill for the building's shared areas, shields the bill from tariff surcharges and delivers progressive savings, is the ideal solution for easing this financial pressure without requiring any upfront investment or complex structural works.

By choosing a NewSun subscription, the building starts to benefit from energy credits generated by regional solar plants, which are fed directly into the local distributor's grid. This smart business model allows the building to forecast its electricity costs accurately throughout the year, neutralising the negative impact of seasonal swings in red tariff surcharges or water-shortage pricing. Stabilising these bills considerably reduces the total monthly service charge passed on to residents, which acts as a direct preventive factor against new cases of arrears driven by an uncontrolled rise in general household expenses.

In addition to the considerable economic and environmental benefit, NewSun Energy Group stands out for the high quality of support it provides to property managers and managing agents. The company offers genuinely human, personalised service to resolve operational queries quickly, doing away with the impersonal treatment and long waits so common in the traditional utilities sector. The building also has access to an exclusive platform, the NewSun Energy Club, to track monthly energy spend in a simple, intuitive way. This data transparency makes reporting at general meetings easier and reinforces management's commitment to modernity and the community's financial sustainability.

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Balancing financial stability and social harmony

Ensuring a building's financial balance by tackling arrears is one of the most demanding and complex tasks in a property manager's or managing agent's daily routine. Success in this mission does not rest on coercive tactics or on embarrassing residents who fall behind, but on implementing organised communication processes that value amicable dialogue, mutual respect and strict compliance with current law. The collection schedule stands out as an essential pillar for standardising contact and providing the community with financial education, ensuring the cash flow stays healthy without undermining a healthy relationship between neighbours.

While management refines its communication methods to recover overdue amounts ethically, it should also look closely within its own operations for smart savings. Adopting innovative partnerships such as a NewSun clean-energy subscription significantly cuts the fixed costs of the building's shared areas, lowering the ordinary monthly charge billed to each household and helping prevent new defaulters from emerging as a result of a lighter financial burden. The cash-flow relief generated by energy savings gives the building greater flexibility to carry out ongoing improvements without placing extra strain on residents.

In this way, by balancing the technical rigour of lawful collection with empathy in compassionate approaches and a constant drive for operational efficiency, management establishes a sustainable, peaceful model of governance. A building's social harmony is directly preserved when residents see that management acts with fairness, professionalism, transparency and respect for the human dignity of every member of the community. It is this balanced approach that turns temporary financial challenges into opportunities for the whole community to mature and grow stronger together.