Accounts

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Accounts

    This query relates to a block of 27 flats where as owners we each own a share of freehold. We have two companies, the freehold and management company and shares are issued when the flats are bought. I am concerned about the running of the companies. In particular, does anyone know what annual accounts we are supposed to receive? We have been getting annual service charge accounts for the management company signed off by the managing agent, which is fair enough. But I was under the impression we should get company accounts signed off by the directors, which we have not been getting (maybe it's because they are dormant companies?). Last year's accounts do not show large payments for legal costs which the directors incurred.

    Secondly, AGMs are not being called. The company is still governed by the 1948 Table A, which means they should be. The directors say they don't have to call one because of the 2006 Companies Act. There are also a number of inaccuracies in the members list shown at Companies House - it includes people who died or moved as long as early 2012. Shouldn't changes be shown? The company secretary has refused to release information about the members register without directors' approval but there has only been one board meeting in the last two years.

    The directors seem to be running the place for their own benefit.

    #2
    This query relates to a block of 27 flats where as owners we each own a share of freehold.
    Well once again you don't the freehold company owns THE freehold.

    Unless the Articles require either company to do so, there is no requirement to do so, only produce them at the AGM ( or if requested at any other general meeting, or allow them to be inspected at the registered office.

    CA 2006 applies if the Articles do not require an AGM to be held.

    You can access Companies House and purchase them to see that has been filed.

    If legal costs have been incurred I would be looking very closely at the balance sheet and reserve fund to see where the legal costs have gone in any of the 3 accounts. I would also check the lease to see what it says about certification of expenses and if the MA able to do so. In turn you might ask for a set of accounts under section 21 and signed by an auditor, and then exercise the right to inspect the vouchers.

    based on the information you glean it may be the basis for an EGM to be called to bring the directors, who have not more right to be "in charge " than any other flat owner, and bring them to heel.
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

    Comment


      #3
      Thanks for your reply. I was under the impression that the members of the Freehold company own the Freehold company and therefore the freehold.

      As to the accounts, I'm not talking about the accounting records but the final accounts.The Gov.uk website states that statutory accounts must be sent to all shareholders. I know these give a limited picture but we are not receiving them at all, only the service charge accounts. I just wanted to check if there is any reason why.

      AGMs - the articcles specify one must be held. My understanding is that this overrides the new provisions of CA2006 unless the articles are changed.

      For the management company, Article 127 of 1948 Table A specifies copies of accounts to be sent where they are to be laid before the meeting. For the Freehold Company, the issue is not covered at all in 1985 Table A. We are certainly concerned about the legal costs and want to identify these from the accounts.

      Comment


        #4
        Just for your information, you may wish to quote to the Agents / Man company directors, that The Company Secretary can be prosecuted for the following offences.
        ( Write to Co, sec and copy to all Directors )


        238 (5) Failing to send company’s annual accounts, directors’ report and auditors’ report to those entitled to receive them.
        239 (3) Company failing to supply copy of accounts and reports to shareholder on his demand.

        See top link CS_offences.htm at http://ram2.hostbyet2.com/
        ( Offences that a Company Secretary may be charged with ( Fine or prison sentence ) )

        No need to quote which companies act, ( Let them find it ) - stating if they fail to issue accounts that you will not be visiting them in prison.

        Comment


          #5
          Originally posted by corin View Post
          Thanks for your reply. I was under the impression that the members of the Freehold company own the Freehold company and therefore the freehold.
          Think of it this way you own it, the company, and it owns the freehold.

          Originally posted by corin View Post
          AGMs - the articles specify one must be held. My understanding is that this overrides the new provisions of CA 2006 unless the articles are changed. .
          Yes and no. Unless its under table A then if the articles predate 2006 Act then there has to be a new resolution.

          Originally posted by corin View Post

          As to the accounts, I'm not talking about the accounting records but the final accounts.The Gov.uk website states that statutory accounts must be sent to all shareholders. I know these give a limited picture but we are not receiving them at all, only the service charge accounts. I just wanted to check if there is any reason why.

          For the management company, Article 127 of 1948 Table A specifies copies of accounts to be sent where they are to be laid before the meeting. For the Freehold Company, the issue is not covered at all in 1985 Table A. We are certainly concerned about the legal costs and want to identify these from the accounts.
          Ok there are several issues here and you are trying to separate them and of course they cannot. I assume in order to answer you, that the only contribution that you make is service charges. if so then where else would the company get the cash to pay legal fees. Thats is why you need to see the accounting records under the LTA for the service charge to see where the money was spent ie if it says £x for an item in the SC accounts, what is £x made up of, and is the cash balance too low as it, or reserves, have been used to pay for the legal fees and it is hidden in the balance sheet.

          As to the company accounts it is as posted, the gov.uk site as always makes a generalized comment,as there is no obligation unless you are entitled to receive them. In the Man Co case you are in the freehold company you are not, and in neither case can you see the accounting records.

          So as you can see if you want to get to the bottom of this the door is the service charge accounts as otherwise what other sums do you pay which they could use to pay the lawyers? Ground rents, old cash balance sale of assets eg lease extensions?

          if the latter then its a case of a group calling an EGM and calling them to account or refusing to adopt the accounts at an AGM if and when held.
          Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

          Comment


            #6
            As a leaseholder, you should get a copy of thee audited service charge accounts within 6 months from the end of the 12 months reporting period.

            As a member of the public , you can buy a copy of the recent company accounts and list of members from Companies House .

            Comment


              #7
              Originally posted by Gordon999 View Post
              As a leaseholder, you should get a copy of thee audited service charge accounts within 6 months from the end of the 12 months reporting period.
              .
              Yawn, once again this has been enacted but has not been commenced. itt is not in force and therefore they cannot expect that.

              They can however demand it.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


                #8
                Sections 423 duty to circulate annual accounts and 424 timescale in force as follows:

                S. 423-425 applied (6.4.2008) by S.I. 2005/1788, reg. 29 (as substituted by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 242(4) (with arts. 6, 11, 12))

                Comment


                  #9
                  What a " I have googled something which I am going to read answered my question but not actually understand it and only read the first bit" response.

                  think about meetings type of involvement e.g. memberships and read it again, and ultimately if they are dormant you are only going to get as single sheet of paper that says we have spent £13 filing returns.
                  Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                  Comment


                    #10
                    Originally posted by corin View Post
                    Sections 423 duty to circulate annual accounts and 424 timescale in force as follows:

                    S. 423-425 applied (6.4.2008) by S.I. 2005/1788, reg. 29 (as substituted by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), art. 3(1), Sch. 1 para. 242(4) (with arts. 6, 11, 12))
                    S.425 ( Companies Act 2006) is interesting :

                    425Default in sending out copies of accounts and reports: offences

                    (1)If default is made in complying with section 423 or 424, an offence is committed by—

                    (a)the company, and

                    (b)every officer of the company who is in default.

                    (2)A person guilty of an offence under this section is liable—

                    (a)on conviction on indictment, to a fine;

                    (b)on summary conviction, to a fine not exceeding the statutory maximum.

                    Comment


                      #11
                      But its not default as the sections are qualified where they do not apply and therefore cannot be regarded as default. Where those exceptions apply the default is NOT to send them out.

                      In this case this chap will it seems end up with two bits of paper saying we spend less than a pizza delivery.
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment


                        #12
                        Sorry senior member, but what a condescending and silly response - you do not actually know what I understand and as a lawyer of some years' standing I am able to make my way around the statute books I dare say as well as you. Have the humility to admit sometimes you are just plain wrong or out of date.

                        Comment


                          #13
                          thanks Gordon 999 to someone who has actually bothered to look at the statute instead of making an instant patronizing response and treating people who comment as idiots

                          Comment


                            #14
                            And just to put it straight, the sections DO apply in this case - you really can't keep suggesting that because the sections are subject to certain qualifications that precludes the application of the provisions as the default position. You have the cart before the horse. In law the fact that it is necessary to make certain exceptions in fact implies that where those exceptions don't apply i.e. the majority of cases, the provisions ARE the default provisions. The fact the default position is overridden where exceptions apply is really saying nothing - and the burden is on the company/company officer of whom the info is demanded to establish that an exception applies.

                            Comment


                              #15
                              Oh dear while on reaction might be " who shat in your handbag" it looks like I ma going to have to explain tomorrow.

                              I don't know, I am busy on consulting gig and I come back to see the toys thrown out of the pram
                              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                              Comment

                              Latest Activity

                              Collapse

                              • How much can the freeholder charge for registering details of a sublet?
                                by Joubert
                                I am a director of a Freehold Company of a small block of 28 flats in a popular residential area.

                                Over the past few years the majority of flats have been purchased by investors who sublet the flats on ASTs.

                                Although the leases between the Freehold Company and the lessees are...
                                04-12-2021, 17:35 PM
                              • Reply to How much can the freeholder charge for registering details of a sublet?
                                by eagle2
                                If the lease states that you may charge a registration fee of £10, that is the amount you may charge, you are not entitled to increase the charge unless the lease specifically allows an increase. Even then you would be limited to a reasonable amount and £100 would be considered to be unreasonable....
                                05-12-2021, 06:55 AM
                              • Reply to Legal Action Against Landlord - Local Council
                                by andydd
                                I sued my freeholder for failure to maintain my driveway, judge was quite damning but I was only awarded £100 as hard to proof any loss BUT in your case it sounds you have exceptional worry over various incidents so yes you could sue and as I found out it was useful, I got costs too and its something...
                                04-12-2021, 21:19 PM
                              • Legal Action Against Landlord - Local Council
                                by Isaac1400
                                Hi,

                                Hoping someone can advise. I am leaseholder and the landlord is a local council. my property is a flat and there are about 55 flats spread out over 3 floors.

                                Now the problem is that over the years the council has failed to maintain the exterior and communal areas - including...
                                02-12-2021, 07:13 AM
                              • Reply to Dilapidated Flat
                                by scot22
                                Thanks all. It was a great price, significantly below market value, plus in further negotiations a reduction to pay for any further work. This was identified by a surveyor. She is not clueless.....
                                Artful in my research I read that can only claim for her ownership period.
                                It is all i...
                                04-12-2021, 19:33 PM
                              • Dilapidated Flat
                                by scot22
                                In a block of 24, unfortunately one flat has become dilapidated. The new owner has bought cheaply. She is now demanding the Freeholder pays to refurbish it claiming they have been negligent. Is there a reasonable case ?
                                04-12-2021, 11:21 AM
                              • Reply to Legal Action Against Landlord - Local Council
                                by Isaac1400
                                Thank you for bringing this to my attention. I have heard of this. In summary do you know if this would benefit those with older leases and not on the builds which have has issues with rising ground rent etc?...
                                04-12-2021, 19:09 PM
                              • Reply to Dilapidated Flat
                                by Macromia
                                If a leaseholder can show that internal maintenance is required because of a freeholder's negligence (e.g. a failure to meet external maintenance obligations according to the terms of the lease), they will potentially have a claim against the freeholder and be entitled to expect the freeholder (the...
                                04-12-2021, 16:59 PM
                              • Reply to Dilapidated Flat
                                by theartfullodger
                                The previous owner might have had a case. The new owner I think only for claims for problems during their ownership. But ianal.

                                Presumably she got a great price as it was so dilapidated
                                04-12-2021, 16:51 PM
                              • Reply to Dilapidated Flat
                                by Neelix
                                What utter nonsense.

                                The new buyer should have had a survey before they purchased.
                                04-12-2021, 16:15 PM
                              Working...
                              X