New flat purchasing advice needed please. RMC run by managing agent as director

  • Filter
  • Time
  • Show
Clear All
new posts

    Hi All,
    I have now requested and reviewed the account from 2017, 18, 19 for the RMC. Accounts for 2020 were not provided. The accounts have been signed off by the Managing Agent on behalf of the directors of the RMC. I also note that the account have been audited by a company related (husband/wife) to an employee who works for the Managing Agent.

    My observations are as follows,
    • I'm not seeing any evidence of the RMC or its members being actively engaged in managing the accounts
    • The managing agent is well aware of the legalities (Landlord & Tenants Act) and are operating in a manner that it would be hard to catch them out unless you are willing to go into details, ask for receipts and so on. eg. Individual large cost maintenance items are close to but under £250 per member, so no special approvals are needed
    • All accounts are prepared by the managing agent with wording that responsibility lies with the RMC directors to approve
    • No major building works have been undertaken, mostly large costs are related to gate maintenance £3000, grounds maintenance £3000 and general maintenance £3000+, managing agents fee £3000+, buildings insurance £3000
    • The reserve funds are simply the retained earnings of the company and if the company overspends on the above items it makes up the shortfall from reserve funds
    • The budgets seems to keep missing out recurring charges from previous year and then at end of year report them as overspend and this is then taken from the reserve fund
    • For a relatively new building (2006 building) standing for 20 years the reserve funds were completed depleted by "redecoration" in 2017. Then the annual charges were then upped and the reserve funds restored by not carrying out some of the budgeted work (underspend)
    • Consequently, In the last 4 years the annual maintenance has gone up by £10,000 with no major works carried out

    Am I being paranoid or is this business as usual for leasehold blocks?


      7.13 of the RICS code requires the annual accounts to be examined by an independent accountant. Tech 03/11 3.2.4 requires the accountant to be a member of one of the professional accountancy bodies and hold a practising certificate. It also states “independent” means that the accountant should not be an employee or director or associate of the landlord, managing agent or any associated company of the landlord or agent.
      The wording of the lease will determine whether or not a reserve fund may be held and the purpose of that fund. 7.16 of the RICS code states that “unless the lease states otherwise, you should not use any reserve fund as a float for the credit of surpluses and the debit of any deficits”.
      The RMC is allowed 6 months after the financial year end to complete the accounts and it is not unusual for an agent to prepare and sign the accounts on behalf of the directors, who remain responsible for the content.


        Thanks, the reserve funds as stipulated in the lease is,



        Latest Activity


        • Breach of leasehold terms with floor that's causing noise; who to enforce?
          by SharedOwnrshpLeaseholdr
          My upstair's neighbour's lease requires him to provide "carpets, or such other suitable floor coverings", and it also has a "nuisance" clause. He has had his flat tiled. I am now being driven nuts by noise from above. Every movement results in impact noise transmission, and I'm going...
          13-05-2021, 21:58 PM
        • Unreasonable Withholding of Consent by Freeholder?
          by wabdiddly
          Dear All,

          Looking for an opinion and some legal views behind what I can do in the following situation.

          My top floor flat has rather wonky flooring, which the structural engineer's report described as "in poor condition and needs levelling to provide satisfactory living...
          13-05-2021, 18:29 PM
        • Reply to Unreasonable Withholding of Consent by Freeholder?
          by Lawcruncher
          You do not need permission to carry out repairs if you have an obligation to do them.

          If the lease only prohibits structural alterations you can carry out non-structural alterations. Taking down or putting up non-structural walls is not structural. What exactly does your lease say about...
          13-05-2021, 21:25 PM
        • Tenants refusing to vacate
          by Landlord2021
          Our tenants have been issued with a section 21 back in December. Having had six months notice they are now refusing to vacate the property as their new build house is not ready. We have sold the property subject to contract. Our buyers want to take advantage of the stamp duty holiday. What if anything...
          13-05-2021, 17:10 PM
        • Reply to Tenants refusing to vacate
          by theartfullodger
          An s21 notice does not end a tenancy nor compel a tenant to leave. The tenant is simply exercising their right, unde s5 of Housing Act 1988 ( Thatcher's ) to remain until court, court order, bailiffs/HCEO. The self-same Act ( Thatcher's ) that permits us landlords to serve s21s.

          Their agreement...
          13-05-2021, 19:19 PM
        • Reply to Tenants refusing to vacate
          by Jon66
          Write to them pointing out you are now able to proceed to court and that you intend to do so. That this will incur costs and legal fees, that court judgements of any sort would not reflect well on their mortgage application, that once a possession order has been granted you will incur additional bailiff...
          13-05-2021, 18:55 PM
        • Lack of lighting in communal areas
          by fos333
          Hi all,

          Who is responsible if the lack of lighting in the communal area results in injury to the occupiers of the flats?

          The lights for the two main blocks are controlled by two photocells that can be adjusted, but at 2100 hrs tonight the internal communal lights had still...
          12-05-2021, 20:26 PM
        • Reply to Lack of lighting in communal areas
          by fos333
          Thanks for the replies.

          The managing agent instructs the adjustment of the photocells, however, the current directors are ignorant to the issue now as it can't be impacting on them.

          Further to the communal lighting not coming on early enough is the fact that the managing agent...
          13-05-2021, 18:44 PM
        • Evidence of leasehold interest?
          by Bengt Lagander
          I have just completed on the purchase of a long Leasehold flat.

          Separately I am apply for a Court order restoration of the Limited Company that own the freehold which was dissolved on 15 th June 2015 so the application needs to be sent by server to the Court before 15th June 2021. This...
          13-05-2021, 18:19 PM
        • Reply to Tenants refusing to vacate
          by 1600e
          There is nothing you can do other than see if a hefty lump sum will persuade them....
          13-05-2021, 18:10 PM