No, that is not correct, you can normally proceed with routine works and larger items of expenditure should be covered by a reserve fund. You need to be realistic, it is extremely unusual for all leaseholders to be fully up to date, it happened once in my time. Just look at some of the service charge accounts, the average unpaid debts normally amount to approximately 1 or 2 months charges. In some cases, they are substantially greater than that.
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That is absolutely NOT what a reserve fund is for - it is not to cover a shortfall from some lessees. Directors who do that deserve to get chucked out. Not sure how you would proceed with routine works either unless very minor.Originally posted by eagle2 View PostComment
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The purpose of a reserve fund is stated within the lease and it should provide funds for the larger non recurring items of expenditure. The annual budget should allow routine works to be carried out.Originally posted by AndrewDod View PostComment
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I'm out of here - sorryComment
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In my view requiring interest to be paid would need to be under the Deed not as a result of an AGM resolution to be enforceable. If proceedings are issued, as others have indicated interest is payable at 8% pa from the due date plus issue fees. But it is suboptimal to start proceedings unless there is no other route to takeComment
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It is unrealistic to expect all leaseholders to pay on or before the due date, it just does not happen in practice.
If the Company wants to impose interest charges to encourage payment by the due date, without resorting to legal action, it is enttiled to propose a resolution for members to decide.
If anyone wishes to argue that managing agents should not deplete funds by taking their fees in advance before they have taken any action to collect service charge monies, I would not disagree but the idea that no services or maintenance may be carried out until all contributions have been collected is impractical.Comment
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