RTM Accountant to check service charges?

RTM Accountant to check service charges?

10:51 AM, 1st October 2021, About 2 weeks ago 3

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I’m just taking a block through the Right to Manage, and we are at the stage of informing the Freeholder. However, many are concerned by the service charges we have received over the 5 years the block has existed and suggesting we have the previous accounts checked to see that all is/was well – this is not a job for a regular accountancy company, so anyone any recommendations?

I know we have the right to go through them ourselves, but no one has the time to take this on. We will probably stay with the management company we have, as we have managed to work reasonably well with them as a Resident Association.

A lot of the expenses have come about because of faults in the block that we have not managed to take to the NHBC for reasons best known to the management company.

We’ve also had an issue with one floor who existed before the new builds, and they have refused to pay service charges for the last 5 years – this is complicated, and I’m not sure any of us understand what happened but the Freeholder and Management are allowing it until some S20 work is done.

Harlequin Garden



Comments

by BernieWales

15:41 PM, 1st October 2021, About 2 weeks ago

These chaps are service charge specialists > https://www.fortus.co.uk/services/property/service-charge-management/

These too > https://www.blockaccountants.co.uk

The latter are likely to be more cost-effective.

by Mervin SX

9:11 AM, 2nd October 2021, About 2 weeks ago

Hi Harlequin,

If you are going through a RTM, why are you looking into the past accounts? Once RTM is achieved, you start with a zero-balance account.

Also, why would you use the previous management company - the whole point of RTM is to take control of your block?

I have substantial experience with RTMs - so, if you are able to get back to the above questions, we could have an interesting conversation/debate.

Regards,
Mervin

by Harlequin Garden

11:01 AM, 2nd October 2021, About 2 weeks ago

Reply to the comment left by Mervin SX at 02/10/2021 - 09:11
No my decision but I'm not challenging it - a few of us have put a lot of work into getting the numbers for RTM. The existing management were working on managing the building minus a whole floor (around 15 flats) service charge as they had an agreement with the Freeholders when the place was converted that they would not have to pay service charge until various aspects were in good order - the rest of us buying new build assumed as you would that all would be in good order on our completion. It wasn't - we got a residents' association together and this was disclosed by the management company - we've now managed as a residents' association to get the works done by working with the Management Company and they are working with us to get works done so that the top floor pay and the service charge finally has some money. I would rather a clean cut but also involved in another (Freeholder even worse, likewise management company) so my role really is getting info and getting us over the line on RTM.
Whilst we'll have a RTM block we will still be using a management company, we've found that the existing will work with us and will allow themselves to be instructed by us (give them the lead and then they pick it up).
The building is a mess, there is so much wrong with it - really we should be challenging the Government as to why they allow Freeholders to be signed of with such shoddy work and then pass on to the leaseholders. Also why they do secret deals with a whole floor (they existed before the conversion) where they allow the service charge to be in deficit so no money to run the building. The whole system stinks.


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