Management fees - shortfall in accounts 2009

shersebastian

Hello,

I am wondering if anyone can help. The company which manage the apartments we live in has sent us a demand for £85 due to a shortfall in accounts for 2009. As this happened to anyone before and is this legal? We have been owners there since 2008 so have been paying service charge since moving in.

Any help gratefully received.

Sher

patman99

Does your management company act on behalf of a residents management committee?, or does it act for a single freehold owning company?.

If your site has it's own resident-owned management company (as is the case where I live), and this subs out the day-to-day running of the site to an external company, then you have the right (assuming you are not renters) to request a copy of the accounts.

BTW, who are your managing agents?.

tbs624

Have a look over at https://www.lease-advice.org

BitterAndTwisted

I think you might find that your quarterly service charge payments are made ON ACCOUNT and therefore it's perfectly normal to ask leaseholders to make up any shortfall once all the payments for insurance, maintenance etcetera are accounted for. An £85 balancing charge sounds to me like the management company's budgeting is accurate.

G_M

As BAndT says, you pay your service charge in advance and it is based on what the management company expects to need for the coming year.

If the costs for the year are a bit more than expected (eg electricity charges for communal areas was higher due to increase in electricity rates or residents leaving lights on all night), then at the end of the year the mgmt comany will need a bit more cash.

daveyjp

Perfectly normal, but you should also have been sent a copy of the accounts so you can see where the money is going and question any costs incurred.

Richard_Webster

When you bought your solicitor should have warned you that it was possible that this might happen as it is a standard issue when people buy flats.

patman99

This is usually the sign of a badly run M/C. Normally, the good ones build-in a yearly surplus which should eventually by big enough to cover any emergency.

daveyjp

Thats a sinking fund and designed to be used every 10-25 years to replace items of major capital expenditure such as lifts. It's not to cover relatively small annual shortfalls.