RICS code

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    RICS code

    Hello
    we are only a small site and for a small site which is supposed to be a dormant RMC the SC seems ridiculously high with most of the money being demanded for company Secretary , company accounts and high management fees and insurance.There are no services. The directors have now said that as we are an RMC they do not have to comply with the RICS code however I thought directors have to follow this also so that they are implementing best practice?

    #2
    Directors should follow the RICS code, there is no exemption for smaller RMCs.
    The high service charges appear to be a separate matter, A Company Secretary is not required and a small RMC should be able to manage without one. Accountants' and managing agents' fees can be disproportionate for smaller blocks. The directors should shop around or use a broker for the insurance.

    Comment


      #3
      Thank you for your help

      Comment


        #4
        How many flats in your building ? How old is your building ? Are the directors appointed from leaseholders of flats in your building ?

        The RMC has to file annual accounts to Companies House. But if the RMC does not receive any ground rent income and its only annual expense is the annual charge paid to Companies House, it can file "dormant accounts".

        The money held in service charge bank account belongs to the leaseholders and is not reported under the RMC dormant accounts. But the service charge account is subject to annual audit by a qualified accountant ( if more than 4 flats in the block ).

        What is the annual service charge demand for your flat ?

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          #5
          Hi again, I have been asked to pay a management fee of £750.00, company secretary fee is £150.00 accountancy fee £180.00 ( the secretary and accountant are the same person). Meeting room fees £40.00. Company house filing fee £14.00. D&O insurance fee £50 Insurance includes a commission paid to broker £650.00 for a 2 bed flat!! Sundry item £25.00 ( no idea what this is for) These costs are before I pay for anything else like other services, repairs and maintenance

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            #6
            How many leasehold flats in the building paying £1134 expense ( for RMC) plus £650 (for insurance ) ?

            Are the directors appointed from leaseholders of flats in the building ?

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              #7
              That figure will be multiplied by 3 and they pay different percentage share contributions.

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                #8
                I have just fallen out with them because I don't agree with all these company costs for a small site, the lease and AOA does not state they are recoverable

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                  #9
                  You have not answered my questions.

                  If the directors are leaseholders in a block of 3 flats , then your only way forward is to apply to FTT for judgement on the reasonableness of the service charges, with sample quotations of management services provided by other companies in your area.

                  If the current directors are not leaseholders of the other flats, then you can ask leaseholders of the other flats to support voting for change of the directors

                  Comment


                    #10
                    Are you saying that £750 for Management Fees, £150 for Company Secretary, £650 for insurance, and so on are just your contribution?

                    How many flats are there in total (you've said that the costs are multiplied by three but you've also said that different flats pay different percentages)?
                    Who are the directors and how many are there? Are all the directors leaseholders in the property? Are all leaseholders directors and are they all members of the RMC?

                    As has already been said, the directors (and any managing agents that represent them) do need to follow the RICs code - and they also need to adhere to the terms of the lease.
                    Any costs that are not payable under the terms of the lease can be challenged at a tribunal and (if the lease doesn't allow for them) they will be found not to be payable by leaseholders.
                    Any costs that aren't payable under the terms of the lease will need to be paid by members/shareholders of the company - but they won't legally be obligated to pay them unless the company articles make this the case, or there is evidence that they have agreed to accept a share of the costs.

                    As far as the high charge are concerned, it is unlikely that any managing agent and accountancy costs will seem reasonable in a relatively small block (and in my opinion they usually aren't reasonable based on my experience of the performance of managing agents and the fact that certification of accounts is of no benefit at all to leaseholders in small blocks). If the amounts that you have quoted are your personal charges they are almost certainly excessive - but that does depend to some degree on circumstances.

                    Are any of the directors, or any leaseholders who would be willing to become directors, likely to be willing to fill the role of company secretary on a voluntary basis (if the company actually requires a secretary at all)? And does the property require enough work to make it necessary to have a managing agent? Remember that, if a managing agent isn't employed the directors (or another person) will need to do all the jobs the managing agents would otherwise have done.

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                      #11
                      Sorry Gordon I did not mean to ignore you and yes the flats were sold to us all, we were each a director, I have fallen out with them over the disproportionate charges as it seems to be negates the reason why we are an RMC meaning managing by ourselves and collectively deciding. They cant seem to see this, its only a small site it seems ridiculous!

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                        #12
                        Yes Macromia that is my contribution and because I am arguing over this notice fee they are threatening me with court action...

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                          #13
                          I think that somebody has made a mistake somewhere, I do not know any managing agent which charges £750 per unit, it looks like they are the total charges for the block and you should be charged your share only. It is a relatively small amount but Companies House charge £14 as a filing fee so that also appears to be a total charge for the block. It looks like either somebody has incorrectly charged you or you may have misunderstood the information supplied to you.

                          Comment


                            #14
                            Thank you Eagle 2 for raising it could be a mistake...however that is what is being demanded. The total figure the property manager is demanding is £750.00 to me and the others different amounts making a final figure above £750.00 They are not charging a fee equal per unit they are charging a fee as a per percentage of the lease.

                            Comment


                              #15
                              Management fees.
                              Info, I charge an absolute minimum of £ 1150 per year, per small block, including Co.Sec work - as an independant Manager.

                              But it's not worth anyones time to charge less than £ 1150 per year for the potential hassle one may get in a small - unresponsive block of flats.( £ 22.11 per week )
                              This means 8 flats would be minimum of £ 145 per flat, and one 4 flat property it's £ 250 per flat + some extras. Thats £ 1000 total.
                              Yours would have to be £ 1150 / 3 = £ 385 per flat ( rounded up ).

                              Not worth getting out of bed for £ 22 per week.

                              If you are getting no joy, then apply to the F,T.T. for the appointment of a manager. That too will be expensive for only 3 flats, but you will get a proper service, although be warned, there are plenty of complaints on here that even F.T.T. appointed managers don't do a proper job, hence my inroads into that domain.


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