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Resident management

Residents are taking over a previously established management firm. Said firm is listed as dormant.

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A local new build estate of 30 houses has been managed by the developers for the first two years. Services charges have been high, have increased without warning or justification and quality of work has been poor. No surprises so far. 

 

However, the developer has done everything it can to resist showing receipts for work done (previous line items included charges for non-existant water and electricity) and has delayed the process as much as possible to maximise profit.

Now the residents are taking over, they've found that the company is listed as dormant at companies House and has never filed accounts. Is this strictly legal? Ive found a few similar questions here which don't seem to get to a firm answer. The company has been active and collecting payments from residents as well as paying bills.

Secondly, can the residents demand an audit for previous years when they take over, so they can see previous accounts and receipts?

 

Thanks in advance.

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By David Ex
16th May 2021 14:49
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By Paul Crowley
16th May 2021 14:59

The service charge fund belongs to the service charge payers. NOT the company.
Dormant co accounts are acceptable, but service charge accounts are required.

If an audit is demanded then the service charge fund will pay for it, so may not be a good idea
I do about a hundred, mostly the accounts are in the company. Some complicated ones have dormant company with separate service charge accounts.
Feel free to PM me with phone number and would be happy to spend half hour on the phone

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By pauld
16th May 2021 15:13

Management companies are usually dormant and appoint managing agents. They are connected. The managing agents are legally obliged to provide you with accounts in a certain time limit. Reviewing receipts will not be of much use as contractors costs are inflated but there will be receipt for those inflated cost so not much you can do. You need to engage a solicitor experienced in these matters if you are considering rtm. It can be costly and procedures need to be carried out correctly. Management companies are all unregulated and are all crooks committing legal fraud through estate and management charges.

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By Paul Crowley
16th May 2021 16:21

How this works
Either the house owners are given the existing company OR
The house owners take up the right to manage (RTM) and form their own RTM company.
My guess is shared roadways, verges etc.
The members will not get it right unless they have dealt with this sort of stuff before
Appoint a managing agent. let the agent deal with the difficult members, or those unwilling to pay.

I have assumed you are one of the members, not the prospective accountant.
Suggesting an audit is the giveaway

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Replying to Paul Crowley:
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By Imaginary Number
18th May 2021 09:21

I'm a writer covering the issue, but I live close by.

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Replying to Imaginary Number:
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By Paul Crowley
18th May 2021 10:29

Best get the facts from both sides then.

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