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Anyone good at looking over company accounts?

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Anyone good at looking over company accounts?

Postby RogerS » 24 Oct 2020, 08:15

We're having issues with the lack of management/incompetency/laziness from the company that is running the retirement block (amongst others) where our late mothers' flat is located. I'm no financial expert but looking at the way this company is structured and the way that the shareholders reserve fund is shooting up in leaps and bounds, well, I smell ordure.

Is there anyone on the forum willing/able to cast an eye over the figures, please ? If so then please PM me and I'll give the details.

TIA
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Re: Anyone good at looking over company accounts?

Postby 9fingers » 24 Oct 2020, 16:14

Having a rising reserve fund in itself is not a bad thing unless the annual charges demanded are also rising and there is no stated plan to build up the fund for a known one off project such as a new roof, window replacements etc.

You need to look over several consecutive years accounts, as well as the budgets for those years and the anuunal minutes of the management company meetings. Some of the lease holders should be attending those meetings and keeping an eye on things.
You can then get a feel for how good the management is at keeping the actuals inline with the budget and not raising the annual charges to cover shortfalls when the reserve fund should be being used.

I am by no means an expert but most of my rental properties are leasehold and I get to see the figures each year and when I've purchased a lease, my solicitor has provided 3-4 years back accounts and a brief commentary on them. She is always hot on the level of the reserve funds.

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Re: Anyone good at looking over company accounts?

Postby Blackswanwood » 24 Oct 2020, 18:47

Roger, I have some experience of freeholders being a bit sharp in their practices through my work. In particular on retirement flats I believe better regulation is overdue. Developers built flats and either retained escalating ground rent and service charges as an income stream or sold them on. Arguably solicitors could have been more switched on at the point of purchase so families realise what they are getting locked into before as opposed to after the event.

Age Concern are a good source of help in these matters and the government have a free advice service ... lease-advice.org

One possible explanation/excuse for rising charges is if the flats have issues with cladding or fire safety. This could be a red herring in this case but isn’t limited to high rise properties.

Good luck getting to the bottom of it.
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Re: Anyone good at looking over company accounts?

Postby RogerS » 24 Oct 2020, 22:54

Many thanks to both Bob's !
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Re: Anyone good at looking over company accounts?

Postby clogs » 25 Oct 2020, 06:54

we just sold our rental retirement flat, thank god.....
seems the management team have all new BMW's and nothing gets done.....
they sent an email saying new windows were needed.....they were changed about 6 years prev.....!!!!

as per usual, the parasites in suits need an easier life.....
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Re: Anyone good at looking over company accounts?

Postby Phil » 25 Oct 2020, 13:48

Rog, locally we are governed, sectional title, by a number of Acts. We are a Company with elected directors from the members/shareholders.

1. We are an NPC (non profit company) = Companies Act which ensures fiduciary duties by the Board

2. STSMA - Sectional Title Schemes Management Act = how you run the business and accountability to the members/shareholders

3. CSOS - Community Services Ombud Service = again how you run the business, also requirements for Reserve Funds. Also they act when there is a dispute between the Owner and the Board. They also handle debtors outstanding accounts, their ruling is equivalent to that of a Magistrates court order.

4. Reserve Fund = we must have 25% of the Administrative Levies in the reserve. This is for unforeseen major maintenance (not in budget)

5. Then to add more to the pie, we also have an MOI (Memorandum of Incorporation)

The annual budget is compiled and presented to the Board for approval and then I submit it to the Owners at the AGM for approval. As well as the Annual Financial Statements.

What regulations/Acts do you have in place to protect the owners (Old Age, Retirement)?

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Re: Anyone good at looking over company accounts?

Postby RogerS » 25 Oct 2020, 15:12

Phil wrote:Rog, locally we are governed, sectional title, by a number of Acts. We are a Company with elected directors from the members/shareholders.

1. We are an NPC (non profit company) = Companies Act which ensures fiduciary duties by the Board

2. STSMA - Sectional Title Schemes Management Act = how you run the business and accountability to the members/shareholders

3. CSOS - Community Services Ombud Service = again how you run the business, also requirements for Reserve Funds. Also they act when there is a dispute between the Owner and the Board. They also handle debtors outstanding accounts, their ruling is equivalent to that of a Magistrates court order.

4. Reserve Fund = we must have 25% of the Administrative Levies in the reserve. This is for unforeseen major maintenance (not in budget)

5. Then to add more to the pie, we also have an MOI (Memorandum of Incorporation)

The annual budget is compiled and presented to the Board for approval and then I submit it to the Owners at the AGM for approval. As well as the Annual Financial Statements.

What regulations/Acts do you have in place to protect the owners (Old Age, Retirement)?

Phil



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