MA continues to provide services but no Service Charge budget or demand issued

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    Originally posted by Macromia View Post

    Yes, FTTs will almost always allow whatever accountancy fees a freeholder demands - largely because supposed 'best practice' is to have an independent accountant certify all accounts. That is a problem and needs to change. So called 'best practice' like this is heavily influenced by organisations that are working more for accountants than for leaseholders.
    In small blocks having certified accounts really is of no benefit at all, and does nothing more than add to annual service charge costs (in my case it adds about 10% to the average annual service charge, and I'm not exaggerating when I say that it takes me less than 15 minutes to carry out a full check of all invoices, including checking whether the costs are actually payable under the terms of the lease. The certified accounts I currently receive don't even meet the requirements given in the lease.
    I think that the problem is that leaseholders do not understand the accountants' reports. The freeholder/RMC/directors remain responsible for the service charge accounts, they issue instructions to the accountant, those instructions are not supplied to leaseholders and the accountant reports back to the freeholder etc not to the leaseholders. The accountants' duties fall under Tech 03/11 and appendix F lists a minimum work programme of 17 items, only one of which considers a sample of invoices. So the accountants' duties have become largely a ticking boxes exercise in order that claims cannot be made against them.

    I don't think that there is any substitution for leaseholders inspecting supporting documents, which should be made available for inspection as a matter of course.
    I suggest that service charge accounts should be explained to leaseholders.
    I agree with you that accountants' reports could be limited to larger blocks or where expenditure exceeds a certain limit.


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