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Accounting complications for freehold enfranchisement company undertaking maintenance obligations?
Cardano
Posts: 1 Newbie
Brief as I can; any advice appreciated.
One estate; two blocks of four maisonettes: eight properties. Share of freehold since acquisition in 2016, thus a freehold enfranchisement company with eight shareholders (seven directors). Vast majority of the original terms of lease unchanged since the 1950s, ie. Lessor is responsible for x/y/z including maintenance of common areas and significant block-specific works (eg. roofing), to be administered by the Lessor but funded by eight or four leaseholders respectively.
Difference of opinion about the 'Lessor' today. Some insist that the freehold enfranchisement company is no more than a container of shares - the 'Lessor' per se does not exist. Others maintain that the freehold enfranchisement company is the Lessor and therefore inherits all the responsibilities ascribed to the Lessor in the terms of lease.
Plenty of confusion and teething problems along the way but most recently, a non-director of the enfranchisement company insists that running the 'Lessor's maintenance works through the enfranchisement company's accounts will create HMRC / Companies House / accounting complications which really must be avoided by way of creating a Residents Association and running them through that instead (with he as the secretary/treasurer of the RA btw)..
In reality seems to me very little possibility of the enfranchisement company breaching the limits of a 'micro company' to necessitate any complicated accounting but Mr non-director has nonetheless convinced a majority that a Residents Association is a must.. No mention of having the RA formally recognised or appointed by the 'Lessor' to undertake such tasks or anything like that, just off we go with a RA and pay your monies in to this other account now please..
Any comments?
0
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