certification of accounts

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    certification of accounts

    A troublesome leaseholder is insisting on certification of all the accounts. We are a converted building of 4 flats. According to the law you do not need to certify accounts for buildings of 4 flats and under.
    But in the lease it says:
    The relevant parts of the lease:


    (i) The annual Service Cost shall be ascertained and certified annually in a Certificate signed by the Lessor's agents or accountants as soon after the Thirty-first day of March in each year as may be practicable and the Certificate shall contain a fair summary of the annual Service Cost attributable to the year to which it relates and shall be conclusive evidence of the matters which it purports to certify


    So do we need them certified or not?

    Would appreciate any insight into this.


    #2
    How is "lessor's agents" defined.

    Comment


      #3
      The lease requires a certificate to be produced either by the lessor’s agents or the accountants.

      I would ask the leaseholder what he is actually seeking, sometimes if he is invited to inspect the invoices etc, he will be happy to leave it at that.

      Comment


        #4
        The leaseholder is seeking to avoid paying money and annoy us at any cost. He's a property developer who is known for this behaviour. He wants to go to court and is thinking up any kind of nitpicking thing.
        I know this sounds mad but he is a bit crazy.
        In terms of lessor's agents, we have a management company managing the building.
        So does this mean the accountant has to certify the accounts which will obviously cost us more?
        What would the agent produce by way of certificate?

        Comment


          #5
          People often misuse the term management company. What do you mean?

          Either the lease will define "lessor's agent", or it is so loosely written as to allow almost anyone to produce the certificate.

          If management company really means managing agent, and the definition of agent is either missing or does not conflict, the managing agent should be able to certify.

          Most people don't really want to go to court (or tribunal, in this case).

          Comment


            #6
            An agent is not independent of the Company so the certificate can probably be prepared by anyone.

            It depends again on the wording of the lease but you should prepare service charge accounts and a certificate would normally refer to those accounts and state that the service charge expenditure is A, the leaseholder’s share is B of which C was charged on account and D is either payable or credited now.

            Comment


              #7
              They are a managing agent.
              This guy does. The managing agents have complained of receiving waves and waves of correspondence from him, nitpicking every detail.

              Comment


                #8
                You should consider whether or not the leaseholders are receiving a proper certificate from the agent. You can invite him to inspect all the documents as suggested in #3 in order to prove that there is nothing to hide.

                Comment


                  #9
                  so the managing agent can provide a certificate.
                  What does the certificate consist of?

                  Comment


                    #10
                    Please refer to #6 last paragraph

                    Comment


                      #11
                      I would hope the managing agent would know hot to interpret that clause, but it should probably say something like:a paraphrasing of the words in red above, together with the level of summary accounting they should already be providing.

                      "

                      Comment


                        #12
                        There should be additional clauses within the lease explaining how the service charge operates eg whether or not there is a budget at the start of the year and how adjustments are to be made at the end of the year. The certificate will summarise the position for each leaseholder.

                        Comment


                          #13
                          I don't think those words are referring to the annual statement. I think they are about the accounts.

                          Comment


                            #14
                            The short answer is that you have confirmed that a certificate is required and the leaseholder is entitled to request one if he has not received it.

                            Comment


                              #15
                              Ok. And the certificate should be issued by accountants? Not the managing agents?

                              Comment

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