Residential Service Charge Accounts
If you are a Landlord, Tenant Management Company or Property Managing Agent owning a property in the UK either as your main UK residence, buy-to-let or perhaps as an investment for student offspring you should in most cases receive service charge accounts within six months of the year end complying with the requirements of your lease otherwise there may be difficulty in recovering the expenditure.
For properties with 4 or fewer units, service charge accounts are not compulsory, but must be provided if a tenant requests them.
Furthermore service charge monies paid by occupants are trust monies and should be held in ring fenced designated bank accounts and be separately identifiable.
If your property has a managing agent who is a member of ARMA (Association of Residential Managing Agents) or RICS (Royal Institution of Chartered Surveyors) their rules require members to adhere to guidance contained in a document known as TECH 03/11 (prepared by ACCA, ICAEW, ICAS, ARMA and RICS) which provides guidance on accounting and reporting in relation to service charge accounts for residential properties.
It should be noted that amongst the best practice in this guidance is the requirement for a service charge statement to be separate to the annual accounts required to be filed at Companies House and be examined by an independent accountant.
At Leonherman we are able to offer this service and have a vast experience of preparing service charge accounts on behalf of tenants, managing agents and RTM companies. Our specialised team always work closely with property managing agents to ensure the expenditure is thoroughly examined and verified for the benefit of all parties.
If you would like to discuss further the requirements of the guidance or are concerned the accounts being supplied to you might not comply then contact Philip Waine our Head of Business Services on 0161 249 5040