OpinionLETTERS
email
info@flat-living.co.uk tel0845 257 6374 fax0845 257 6319
charges In August 2009 I exchangedemailswith Flat Living regarding the delayedintroductionof intended revisionsto theCommonhold and Leasehold Reform Act
2002.Doyou know if it has beenamended? In particular Iamconcerned with the proposed possibility/requirement/ need/sense to separate the ServiceChargeaccounts fromthe Statutory Co. accounts. Iamstill treating
theseasacombined Company account with detailed expenditure accountincludedand also includingthe TrustTax obligationsand theShare Capital.
ARMAreplies
The long delayed changes to service charge accounting which were part of the 2002 Actare now postponed indefinitely.Whenthe government cameintoofficeit decidedthatthe regulations needed to implementthe changes were notapriority; no official announcementhas beenmade. In ordertogivesomebest
practice guidanceARMA, theInstitute of Chartered Accountants forEngland andWales (ICAEW), the Association of Chartered Certified Accountants (ACCA) andthe RoyalInstitution of CharteredSurveyors(RICS) have cooperatedtoissue joint guidance on accountingfor service charges (see News page 9ofthisissue). It can be foundonthe downloadable publications section of the ARMAwebsite. In addition, ARMAhasissuedasummary briefing of the guidance for lessees(see pages 46-47ofthis issue forLAN08 Accounting forService Charges –Best Practice). Use this link to find
thedocuments:
www.arma.org.uk/public/h/ downloadable_publications
32 LIfT advIce needed CACarvell,Dorset
Wehave anRTMforablock of eight flats. It has a lift, installed in 2007, and the samecompanyhasmaintained it since then.Wealso have lift insurance andinspections,andwecarryout any works that are recommended by them. However, the company that installed thelifthas just contactedusand said on their lastmaintenance visit they have nowgot a number of recommendations for us.Wecannotwork out if these recommendations areasneakyway to makemoney (theworkwouldcometo some£2,000 andweonlypay £500a year for themaintenance) or if they are a legal requirement.
They include things like: nprovisionofalandingyellowguard to ‘protect the public fromopen entrances’ -there is no public,merelythe eight owners (nochildren)sothisseems strange, especiallyastheydidn’tfeelit wasnecessary at anytimeoverthe last four years. They tellmeit is a require- ment under BS7255 SafeWorking on Lifts, but does this apply as we have no employees?
thebottom A‘race to thebottom’ is normally defined as a competitivesituation betweencountries or states that leadsto
Managing Agentsmust avoidraceto
nprovisionofaCO2 fireextinguisher. Weagreed as owners that if therewas a firewewould leaveimmediately -none of us will use a fire extinguisher, so is this a requirement? nAladder needstobeprovidedfor safe ingress - again this has never beenmen- tioned before. nahandrailneedstobeinstalled to the back of thecar to stop theinspection personnel falling fromthe top of the car. Weneed someadvice - perhaps you
can help! Nameandaddresswithheld
Richard Debenham of Elevation Lifts Ltd replies
As far as I can see the points are only recommendations from the lift company to the tenants and cannot be enforced by law. However, I would add that in some circumstancessomeofthe points raised by the lift company wouldmake sense, especially a handrail being fitted on the car topalthoughIdon’t know why thecompany didnot fit this at thetimeofthe original installation. The price also seems rather excessive.
dismantlingofregulatory practice in order to seek ever better competitive advantage.Weare seeing thesamething happen in propertymanagement anditistothe ultimate detrimentofour client’s assets. Howthis affects thestandardof management can already
be seen on schemesthat have hadlittleornocredit control activity, poor health andsafetyrecords andconstantturnover of on-site
staff.Itleads to adownhillspiralthat normallytakes twoto three years to reveal itself. Howdo I know? Because we are in the process of
Accounting for service
Flat Living
Ifyouhaveaquestionorwouldliketosharewithotherreadersyourideasorexperiencesof livinginaleaseholdblock,wewant tohearfromyou.
Addressyourcommentsorqueriesto theFlat Living teamat
info@flat-living.co.uk
rescuing a number of schemes that have chosen theirmanagersentirelyon price and are nowtrying desperatelytocollect outstandingsums,raise budgets and get their asset back on track. Manywouldargue that
Someof the points raised by the lift
companymake sense...
propertymanagement in theresidential sector is longoverduearegulatory frameworkwithinwhich to operateandthere are manygood arguments to support this.But operating in this sector isnot without regulationand Icanthinkoffewothers that are required to act in accordancewith somuch legislationandregulation already – particularly relatingto fiduciary duties andtohealthandsafety. This in itself is part of the problem.If youchoose to bypass sections of regulationthathave cost implications,thenyoucan anduntil thereisaresultant tragedyoralargenumber of peoplelosetheirmoneyno one takesanyrealnotice. Statutory requirements
and regulations do not exist to be bypassed – they arerarelyadvisory. They existtoprotect us allfrom poororcriminalpractice. Seeking best valueisone thing-cutting outcosts altogether is another. I have recently had to withdraw fromadvising a group of residentswho wished tomanage amajor works project themselves in order to avoidall that nasty, costly consultation and supervision. Consumer pressure
has good causetoexist in theresidential sector. Cases of mismanagement and overcharging are myriad.But beware!There aremanywho are now seekingtotakeadvantage of such misfortunewho have neitherthe track record nor the expertise to undertakewhat remains a highly skilled role. DavidClark,
Mainstay Group Winter 2011 Flat Living
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