Flat-Living.co.uk Grant Shapps Having your say…


There was a fantastic response from readers commenting on the exchange of letters between Flat Living and Grant Shapps’ office. Below are some of the highlights. Keep your comments coming….


I think that although ARMA and others will continue to press for progress on regulation we must do the best we can with what we’ve got. To that end, would it be possible for you to direct us to where we can find copies of the two codes of management practice that the official’s letter refers to? I would like to print and read them and have them in my brief case at our Directors’ meetings!


I am delighted the government is not going ahead with keeping of separate accounts as you are trying to suggest. I think that you should set limits above when this would be required and not just apply the regulations to all blocks of flats. I am an accountant who owns a flat in a small block


of 12 flats with an annual service income of less than £35,000 and we the residents carry out all the work which an outside Management Company would perform. We have our accounts audited and we present them to the members who are very satisfied with the way we keep our accounts, handle our maintenance, place our contracts and handle all our financial affairs. We do not want Big Brother-style red tape being imposed


on our small Resident Management Company and nor do the residents. You should be more flexible with your demands for small resident companies who spend far too much time with health and safety issues and all the other unnecessary company legislation that applies to large landlord controlled blocks of flats. Unless you have experience of these small resident management companies, you will have no idea how expensive it is trying to comply with so much unnecessary red tape and how large a percentage of our service charge income is taken up trying to make sure we are not in breach of these regulations. As a further comment, I think you should also listen to the


views of the small audit firms who carry out this work on behalf of the small blocks of flats who like using a sledge hammer to crack a nut.


I am appalled about the decision not to proceed with the service charge arrears. I have had over three years frustration at not being provided


with relevant information and accounts for the service charge I have paid and have also been involved in taking a management company to an LVT.


As a director of a small block of flats in Surbiton, I thought that these proposals were a burden on managements such as ours. The new regulations added nothing. Having to open a new account for maintenance contributions was unnecessary, only leading to more bank charges. The requirement to have the accounts audited was just an extra cost for no good reason. The residents of this block are given full details of income and expenditure. The new regulations were burdensome and offered no advantage to the residents. The same applies to many blocks of flats throughout the country. I say Grant Shapps has made the right decision, which cannot often be said for a government minister.


I believe the government is letting down leaseholders by not pursuing the part of the Commonhold and Leaseholder Reform Act 2002 regarding service charge accounting regulations. I thought this had already been implemented. We are fortunate in that we use a good managing agent that has separate designated annual service charge bank accounts and we receive an independent accountant’s report each year. Having formed an RTM Company in 2007 we are able to control this but I am aware that many leaseholders are at the mercy of their landlords. In my view it is essential that this part of the Act is


enacted. The extra cost of having an accountant’s report each year is minimal compared to the possible cost of an unscrupulous landlord.


As secretary of a management company responsible for self- managing one block of 6 flats I did not welcome the additional costs of accountancy fees’ that we faced under the latest proposal. Therefore, I am rather pleased that it has been dropped and I do not support your position on this matter.


Management companies do not automatically adhere to


the terms of the lease and despite having the right to request at not being provided with relevant information it does not mean managing agents provide it. Leaseholders need more legislation on their side and more action needs to be taken to enforce that legislation.


You can obtain your copy of the RICS Service Charge Residential Management Code by clicking onto this link: http://www.flat-living.co.uk/information/service_charge_residential_management_code.html


14 www.flat-living.co.uk


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