Issue No. 90 Autumn 2009
Federation of Private Residents’ Associations Newsletter
tax rather than Corporation Tax. However, any income tax liability should be covered by the tax credit attached to the interest payment, whatever the amount of the income (after 5th April 1007 – See s. 480 (3) (c) Income Tax Act 2007), and up to £500 in the tax year 2005/06, and £1,000 for the tax year 2006/07. Consequently, if I am right about what the “reserve fund” is, there is presumably no tax to pay, but you may have to point out to your accountant or the Revenue, that Corporation Tax does not apply.
If I am wrong, and the “reserve fund” merely represents income from the company’s own money e.g. undistributed profi ts, then Corporation Tax may be payable. Possibly, if this is the situation, you had been able to take advantage of the zero rate of Corporation Tax for very small companies. I hope this helps. The answer to your question does depend upon whether the money in the “Reserve Fund” came from, and what it can be spent on.
We are trying to source a lift to fi t into a stairwell and have not been able to fi nd one with the minimum dimension less than 83cm. We have 80cm available. Can you suggest anything?
Paul Masterton, FPRA consultant and expert on lifts, replies: There are no conventional lifts that will fi t into 800 x 800 shaft. The only products on the market would be a domestic lift. The smallest shaft we have been able to fi nd is 785w x 820d. This would be a one-person car and as it is a domestic lift, it would have constant pressure push buttons and is only suitable for low household traffi c, not for a block of apartments. If the stairwell cannot be increased in size, then a different option could be considered, like a new lift shaft on the outside of the building.
Are our managing agents obliged to provide us with copies of the service contract between them and the freeholder that they have in place at our development? If so, what is the relevant legislation we need to quote? FPRA Chief Executive Robert Levene replies: The managing agents have no obligations to the Residents Association, nor do they to the individual leaseholders; the managing agents are appointed as agents of the landlord and any contract that may or may not be in place will be between the managing agents and the landlord. A recognised residents’ association, however, does have a right to be consulted, by the landlord, about managing agents. This right is under Section 30B of the Landlord and Tenant Act 1985. The recognised residents association may at any time serve a notice on the landlord (not managing agent) requesting him to consult the residents’ association in relation to the appointment or employment of any managing agent.
The landlord is obliged to respond within a month of service of any such notice, reply specifying the obligations which the managing agent discharges on his behalf and allowing a reasonable period for the residents’ association to comment on the manner in which the managing agent has been discharging the obligations and the desirability of this continuing.
CHANGE OF AGENTS Q A
We have recently changed managing agent and the previous agent has still not passed over the funds. We are in a position where the new managing agent has bills to pay but no money to pay them. Is there anything we can do to bring pressure to bear on the old managing agents to get them to transfer the funds over immediately? FPRA Legal Adviser Nick Roberts replies:
All I can suggest, I am afraid, is that you write to the effect that if the outgoing agents will not hand over the funds to the new agents, you will take legal proceedings. Sometimes people assume that they cannot do so if they are not in a position to say how much is owing, and how much therefore they should sue for. The solution is to say that you will sue for “an account of dealings”, and an order that they pay over whatever is found due. “An account” would mean that the court require the agents to produce accounts which you could object to, and would, if necessary at the end of the day, would have to be approved by the Judge. Proceedings should be taken by the ground landlord or by a residents’ management company i.e. whoever is entitled to enforce the service charge. They will have engaged the agents, and agents must therefore account to them for their dealings.
How long do I need to keep the following records for my residents’ association: 1. Financial 2. General correspondence FPRA Chief Executive Robert Levene replies: The minimum period we would suggest is six years, although there can be rare circumstances when certain papers can be required much longer or indeed indefi nitely. My own RA has kept all records and correspondence for over 20 years and has repeatedly found the need to refer to things for long after what may be required in law. Therefore I suggest that you do not just destroy everything after six years, but instead look at the paperwork after six years and fi lter it if you are unable to keep everything.
Our fl ats were built around 1994. Health and Safety say we should have an asbestos check if they were built before 1999. Is this compulsory? If we check with local building control and the builders if any asbestos was used and they say none was used, would that be suffi cient?
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