Property manager questions

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    Property manager questions

    Hi all hoping someone can point me in the right direction. I have a background working in property but first time for myself so some areas I am not experienced in.I have been offered a property management contract for a small block of flats. As such I have lined up quotes for indemnity insurance, public liability and know I need to join a public redress scheme. The area I am stuck is where it comes to bank accounts.

    The lease is old fashioned so landlord has to pay up front and reclaim the costs. Under regulations if you hold clients money you need a client management account and money protection. It does however not count as client money if the services are rendered and then charged for. A hold account can't have an overdraft facility. The landlord has always kept 2000 grand in the account to manage most of the costs short term.

    My question is if the landlord has his business account and I have access to it in my role to pay the bills etc do I need any insurance for this. Is this allowed?

    The alternate seems to be I have a business account and need to front the costs. As I couldn't have the landlords money in that account.

    Anyone with experience in this area advice would be massively appreciated. The government web pages aren't the most helpful.


    #2
    As you are seeking advice to run a business, I suggest that you employ a consultant.

    Comment


      #3
      All service charges and reserve funds have to be in client accounts held in trust.
      The fact that service charges are retrospectively budgeted is totally irrelevant - money paid does not belong to you (and in any case apparently retrospective accounts are in fact often prospective in a sense because lessees paid an initial amount upfront when the lease was purchased).

      I suggest you need some serious training.

      Where do you propose asking lessees to send service charges.

      Comment


        #4
        Thank you both.

        I have now figured this out. There was the one area I was slightly confused on due to a small section of wording.

        The appropriate insurances and rules will be complied with including a client account and CMP as well as ensuring I have a AML policy in place. As you stated I needed to do a bit more research on this. I was asking more for ideas of where to research this rather than advice directly. I want to make sure I d9 this right and am researching before I agree to take anything on I wasn't prepared for.All sorted now though, thank you for taking the time to reply.

        Comment


          #5
          It is a fraud offence, if you order services for the block of flats and have no funds to pay for those services. So you must set up an annual budget and demand service charge contribution from each leaseholder paid into a "client account".

          The managing agent has to comply to the RICS Residential Management Code v.3 which you can buy from RICS Online Bookshop or view online.

          Comment


            #6
            Thank you Gordon that has put my mind at rest. I was doing the right things just not explaining myself very well. I would rather turn down the contract than risk doing something illegal. Therefore it was good to read and confirm that I have been setting up the right things

            Comment

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