Question 1

Lack of Transparency

Accepted Answer

Q: Can we request accounts on behalf of residents under Section 21 notice, if we are not formally recognised by our managing agents? We don’t have the required 50 per cent. We have been told we can’t. They have previously stated they will work with us, however. Does this also apply to Section 22 notice to inspect the receipts? We are still awaiting the 2018 accounts, which continue to be delayed. We only received the 2017 accounts in November 2019, and service charges for 2020 still have to be issued, which is impacting on the managing agents’ ability to deliver due to an apparent lack of funds. Is there guidance that managing agents have to follow in terms of detail that has to be published, as ours lacking in transparency? Our development consists of a number of blocks/phases. If they won’t share with us, does a representative from each block/phase need to request, or would you recommend all our members request individually? Phase 2 of our development is a collaboration between two developers, unlike Phase 1, which was one developer. Do we need 2 separate residents associations, or can one represent both? FPRA Committee Member Mary-Anne Bowring replies: All leaseholders, whether RA or not, have right to be presented with the service charge accounts. You can invoke a management audit. A service charge management audit, a legal right of two or more qualifying leaseholders arising from S76 of the Commonhold and Leasehold Reform Act 2002, has the purpose of ascertaining whether the management functions and expenditure of service charges are being discharged in an efficient and effective manner. This type of audit is very different to an audit in accordance with the ISAs as it covers value for money, management policy and whether costs are reasonably incurred, ie a bridge between the numbers, and an expert opinion of value and reasonableness. [Submitted March 2020]

Question 2

Lack of Transparency

Accepted Answer

Q: Can we request accounts on behalf of residents under Section 21 notice, if we are not formally recognised by our managing agents? We don’t have the required 50 per cent. We have been told we can’t. They have previously stated they will work with us, however. Does this also apply to Section 22 notice to inspect the receipts? We are still awaiting the 2018 accounts, which continue to be delayed. We only received the 2017 accounts in November 2019, and service charges for 2020 still have to be issued, which is impacting on the managing agents’ ability to deliver due to an apparent lack of funds. Is there guidance that managing agents have to follow in terms of detail that has to be published, as ours lacking in transparency? Our development consists of a number of blocks/phases. If they won’t share with us, does a representative from each block/phase need to request, or would you recommend all our members request individually? Phase 2 of our development is a collaboration between two developers, unlike Phase 1, which was one developer. Do we need 2 separate residents associations, or can one represent both? FPRA Committee Member Mary-Anne Bowring replies: All leaseholders, whether RA or not, have right to be presented with the service charge accounts. You can invoke a management audit. A service charge management audit, a legal right of two or more qualifying leaseholders arising from S76 of the Commonhold and Leasehold Reform Act 2002, has the purpose of ascertaining whether the management functions and expenditure of service charges are being discharged in an efficient and effective manner. This type of audit is very different to an audit in accordance with the ISAs as it covers value for money, management policy and whether costs are reasonably incurred, ie a bridge between the numbers, and an expert opinion of value and reasonableness. [Submitted March 2020]

Lack of Transparency

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