Audit

[Stacker]

A shareholder with the required percentage needed to call for and has asked for the company and service charges to be audited however they are all in one account, how common is it for audits to be asked for and who pays?

[AndrewDod]

You pay. Audits in general are a waste of time and money compared to you actually having the accounts (and are sometimes corrupt unless you employ an auditor of your choice). Rather get the accounts and invoices.

[Gordon999]

Leaseholders have the right to request audit for the service charge account. See item 12 .

https://www.lease-advice.org/advice-...charges-wales/

[AndrewDod]

Leaseholders have the right to request audit for the service charge account. See item 12 .

https://www.lease-advice.org/advice-...charges-wales/

This is yet another vacuous bit of legislation -- it is only available if only available two thirds of the lessees support it (and under those circumstances there are usually better remedies). It also completely fails to be of use in the circumstances these problems most often arise -- a minority lessee in a leaseholder owned company.

[Stacker]

So Andrew what would be the better remedies as Section 21/22 has not been complied with?

[Stacker]

So does the company pay as its a company shareholder calling for this? Cant see this being justified through the service charges? Its a company expense?

[AndrewDod]

So Andrew what would be the better remedies as Section 21/22 has not been complied with?

Well to call for an audit, you would have to be in a substantial majority, and a company can hardly not supply the accounts to the majority of lessees asking (because they are the company).

So does the company pay as its a company shareholder calling for this? Cant see this being justified through the service charges? Its a company expense?

Definitely not a Company expense (which would have to be paid for by the lessees somehow anyway, presuming everyone has a share in the company). Company expenses are things like accounts filing at Companies house (£13), possibly company stationary, posting out ground rent demands, secretarial costs, and work on COMPANY accounts (ground rent accounts etc) .... everything else -- if it is a valid expense - is service charge.

[ChloeRadshaw]

Very interesting but I think you have this wrong. A shareholder over a certain percentage (i think 10%) but definitely 20% can insist on company accounts being audited as an expense of the company. Which means all shareholders will pay

i looked at this carefully and am dead certain. This applies to a minority shareholding and shareholders do have powers for unfair prejudice and other remedies

[AndrewDod]

Yes but you completely misunderstand what company accounts are. Service charge accounts are not anything to do with company accounts. There are completely separate rules for service charge accounts both in terms of audit and viewing (which strive to achieve as much opacity as possible)

So no, 10% of "shareholders" most definitively cannot demand and achieve an audit of service charge accounts (for what that would be worth anyway in most cases). Your "dead certainty" is absolutely wrong. Sorry.

Most senior folk on the forum have been around the block a few times.

[ChloeRadshaw]

Sorry you are right - I was talking about company accounts obviously - Sorry for confusion