Arrangements for leaseholders to receive accounts

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    Arrangements for leaseholders to receive accounts

    Our financial year ends on 25 March. Our old managing agents used to come down early in April with the draft accounts, talk to us about what we needed doing and then we would get the demands for the following year.

    Lately the new managing agents have been sending us the accounts and demands later and later and last year it was 31 December. This is because the freeholder didn't pass them straight away. I really don't know why because they are only on two A4 sheets of paper. They over budget and use that money to keep them, and us, afloat from April to late in the year. The lease says "A proportionate share of the cost incurred by the Lessor in complying with Clauses 5 (B) .... to be assessed by the Lessor’s Accountant whose certificate shall be conclusive evidence as to the amount so payable such sum to be paid by the Tenant on the Twenty-fifth day of March in every year. I have asked to see the accounts before they send them out to the freeholder who is a chartered accountant, or he passed the exams forty odd years ago!. They refuse which is annoying because last year and the year before, we found mistakes which meant the accounts people had to calculate everything again.

    We are only 18 flats and I have just emailed the agents saying "With three people in the process of selling their flats, they are going to need the accounts in the next month or so. They have all got buyers. They won’t want to wait until December." and got this reply

    "A....starts to do the accounts 3 months after the year end in all blocks to ensure all invoices for the year have been raised. Strangely we still get invoices arrive after this time but one has to place a limit somewhere.

    Once done she sends it to the freehold for approval as you well know and no drafts are circulated in advance.

    I have no control over this process but I will make sure to have a budget ready to go once the accounts are ready to circulate."

    Should I fret about it? Normally, I don't but other people get very put out about the lateness of the account.



    #2
    A budget for the year that is starting shouldn't be dependent on receiving outstanding invoices from the previous year, or on getting accounts for the previous year finalised and signed off.
    It may be advantageous to know whether any credit has been carried forward, or whether there is a debit balance to pay, but that shouldn't be essential.

    A decent managing agent should also be aware of any invoices that are outstanding, how much they should be, and be able to chase them up.

    It sounds like the managing agents need to get their act together.

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      #3
      The service charge accounts should be prepared within 6 months of the year end, so in your case 25 September at the latest. Waiting 3 months before making a start on the accounts seems to be an excuse, outstanding charges are often estimated and adjusted when the actual bills arrive. It is worth inspecting the supporting documents because errors do occur.

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