Flat Management First Accounts

davidwm

Under the leasehold reform act we brought the freehold of our property (together with 3 other flat owners) and set-up a management company.

We are now due to send in our first years accounts. We understand these can be just the abbreviated version ie: just a balance sheet.

As we purchased the freehold for just £1.00 + solicitors fee's does anyone know what we should include in the balance sheet (if anything!)?

As we only each pay £50.00 per month maintenance we are reluctant to employ a professional accountant.

richt71

I'm sorry but you really should get an accountant. Remember submitting accounts wrongly could lead to a fine and having to re-do the accounts. I'm not sure about you but if you start getting £100 fines then a accountant would seem cheap.

McAzrael

The balance sheet shows a breakdown of the assets owned by the company, usually with a previous year comparison. Abbreviated accounts are more than just a balance sheet (although not a lot more). I agree with richt71, you need an accountant. Apart from the money, imagine what happens when one of you gets something wrong and your neighbours don't take the attitude that worse things happen at sea.

vivatifosi

Hi davidwm,

I'm a director of a local resident's association for some freehold properties. We have a managing agent that works on our behalf, though we have a lot more properties, so for us it makes sense (plus the fact it is mandated in our deeds).

I can't profess to know a great deal about leasehold properties, but I do know from speaking to our managing agents that there are two ways of doing the accounts for a property. One is to run the company as dormant and purely keep active service charge accounts. The second, which is our preferred route, is to keep the accounts as an active company. In our case, as I say, we prefer the second. There can however be issues if you are seen to be making a profit. You need to be very certain that you are showing your "sinking funds" properly, as incorrectly apportioned it appears as a profit.

With that in mind, I'm afraid I second what the others say - get an accountant. It is expensive, but its important to get these things right.

Taking that side of things out of the equation, I've also found it useful to draw up a spreadsheet showing the months of the year and when things need to be done. You will have mandatory insurances, annual return filings (if a limited co), account filings etc all of which need to be done. If you all have an Excel spreadsheet magneted to your fridge then there's less chance of missing something.

Savvy_Sue

Is there some umbrella body or association that people like you can join? Might give you advice / discounts on accountants / tips on how to keep accountants costs down. I tried a quick google but don't really know what I'd be looking for ...