Question 1

Reasonable Charges

Accepted Answer

Q: What is a reasonable fee to charge for filling in the answers to multiple questions from a solicitor acting for a new purchaser of a flat? We have provided this information free in the past but I was told at your AGM that it is normal to charge! FPRA Chairman Bob Smytherman replies: Making a charge for completing this information will vary from block to block and will depend firstly what your lease says about making such a charge and, importantly, how you will account for this income by adding to service charge account or company account. In my own block I complete these enquiries myself as Company Secretary without making a charge for my services although our accountants and solicitor do make a charge for the responses they provide. We debated at our recent directors’ meeting whether we should be making a charge which - as you suggested - is a reasonable thing to do. We took the view that it was better for me to do this for which I receive an Honorarium as Company Secretary, rather than make a charge which will require additional administration in itself and income that will need to be accounted for. As a self-managed block we feel this is not something we should be charging prospective shareholders joining the company. If you do decide to make a charge I suggest asking our legal advisers as to whether this is possible and how the income should be accounted for. [Submitted January 2017]

Question 2

Reasonable Charges

Accepted Answer

Q: What is a reasonable fee to charge for filling in the answers to multiple questions from a solicitor acting for a new purchaser of a flat? We have provided this information free in the past but I was told at your AGM that it is normal to charge! FPRA Chairman Bob Smytherman replies: Making a charge for completing this information will vary from block to block and will depend firstly what your lease says about making such a charge and, importantly, how you will account for this income by adding to service charge account or company account. In my own block I complete these enquiries myself as Company Secretary without making a charge for my services although our accountants and solicitor do make a charge for the responses they provide. We debated at our recent directors’ meeting whether we should be making a charge which - as you suggested - is a reasonable thing to do. We took the view that it was better for me to do this for which I receive an Honorarium as Company Secretary, rather than make a charge which will require additional administration in itself and income that will need to be accounted for. As a self-managed block we feel this is not something we should be charging prospective shareholders joining the company. If you do decide to make a charge I suggest asking our legal advisers as to whether this is possible and how the income should be accounted for. [Submitted January 2017]

Reasonable Charges

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