How can I audit the expenses of my managing agent?

[DulwichLondoner]

I am a leaseholder in a block of flats.

The managing agent has just distributed copies of the 2015 (yes, 2015) financial statements. One thing that caught my eye is that about ? 1,000 would have apparently been spent on the maintenance of the video entry phone system in 2014 and 2015; however, my neighbours did an informal polling of the block, and the 60% who replied confirmed that the video has never worked in the last 5 years.

Of course that money could have been spent on the maintenance of the rest of the system: the video doesn't work but the audio does. Or, maybe, just maybe, the expenses have been inflated or misallocated.

My question is: what do I have the right to ask my managing agent, and what does he have an obligation to provide? I went through the terms of my lease, but it's all very generic. Can I demand to see the actual invoices? Can the managing agent refuse?

PS Yet another proof that the leasehold system is an exploitative anachronism, a medieval heritage which survives only in the UK (excluding Scotland) and in some former colonies!

[Peckhamgatecrasher]

I seem to recall (from years' ago) that one cannot be charged more than 18 months retrospectively. Try googling to see if that still applies.

[DulwichLondoner]

I understand that a landlord (in the sense of freeholder) must demand payment within 18 months of incurring certain expenses. However, it's a bit of a moot point in my case, because freeholder and managing agent have a nice tendency to always overbudget "for prudence". To be clear, they are not asking now for a payment related to 2015: only now are they certifying the financials for 2015, which therefore verify whether they had under or over budgeted. But they always demand payment upfront every quarter.

[DulwichLondoner]

Way harder than I would have hoped: https://www.fsp-law.com/articles/getting-information-on-service-charges-not-so-easy

[Guest]

Ask the Managing Agent for copies of the invoices, they are obliged to let you have them.

[muffins78]

You can ask for every invoice for each item of expenditure. We used to use a managing agent and we now self-manage. I believe a previous agent charged for intercom costs that were never incurred and further confirmed by our intercom system company.

As much as self managing is hard work, it's cheaper and more reliable. You know exactly where every penny goes and what state your building is in.

[Guest]

I would not recommend managing yourself nowadays especially a block of flats. There are so many laws, rules and regs to keep to, and you would have to keep up to date with any changes which are easily missed if you are not a registered agent. You would also need a bank account that would need to be administered and register with Companies House. Plus if anything goes wrong you risk legal action.

[DulwichLondoner]

Good point.

IMHO the key point is not so much whether you manage yourself, but who the managing agents are accountable to.

One of the absurdities of the leasehold system is that leaseholders shell out all the money yet have very little recourse. In the best cases, freeholders and managing agents have no interest in keeping costs down as it's not their money. In the worst cases, they can collude (and/or be part of the same group) to inflate prices. Have you heard about the St George Development in Vauxhall and how leasehodlers won ?1MM in compensation from the freeholder?

http://www.dailymail.co.uk/property/article-2039128/MARKET-WATCH-Flat-owners-win-record-1m-payout.html

https://www.theguardian.com/money/2011/feb/12/peverel-tenants-fighting-back

Something I would like to discuss with my neighbours is to hire these guys, or someone similar: http://www.urbanowners.co.uk/

They can assist you in exercising your right-to-manage rights, and would then manage the block on your behalf. On paper it seems like a reasonable compromise (more expensive than managing yourself, but cheaper than being scammed by freeholder + managing agent). Does any one have experience with these services?

[Jules-and-Boo]

no - but I'm in a similar position to you and would be happy to confer.

Looking to get rid of Property Management Co, whose director has weaseled himself into position as Co Secretary of the Freeholders Ltd co.

You can probably imagine....

legal proceedings about to commence...Do you know a good Lawyer?

[muffins78]

I had a look at the site, they offer the same type of services as a traditional high street managing agent. We had our right to manage etc in place for our last agent, it was exasperating and I spent more time in communication with them.

I'd suggest you find someone who's used them, and if they are good - I'd be interested too - but on the whole look at what you can do yourself and what you'd like them to do. For example the company secretary tasks are simple. The buildings valuation only needs to be done every three years. If you get a fire health and safety report done, you could use that as a means to establishing annual health and safety checks, with some additional points which I could help you with.

Also, important to note, our previous agent engaged a surveyor for buildings insurance valuation. Recently we had to get a new one, and we were shocked to find out the agents surveyor calculation was significantly different and we were massively under insured.

I could write a book :) :)

[Megan Thompson]

in this case, you can also refer to the federal code: https://lawrina.com/us-law/federal/codes/ and find there the relevant code to follow in this case