Flat management company - do you own yours and how do you run it?

[maggiethecat]

Curious - we 3 leaseholders own the freehold and manage the flats - pay the insurance, maintain etc - not much in it.

We don't hold formal meetings or collect ground rent and wonder how other people (where only a few flats involved) run theirs?

Just done the yearly accounts for Company House for our share of Freehold flat. Three flats all three owners are directors we have a meeting as and when we need to agree on any work to be done and how much maintenance to pay. We tend to pay twice a year. I do the accounts I have a copy of the legal letter you need to send saved as a word doc so just update it each year with the balance sheet takes about ten minutes. I file a copy of income/ougoings in the file with bank statements and receipts and voila all done. One flat changed hands recently and we had the most ridiculous form from the solicitor we sent back copies of the accounts and wrote don't know on 90% of it. It's easy.

That sounds similar to what I do except that we do everything by email. We don't do the AGM stuff.

For re-mortgage purposes I wonder if a lender could ever enquire about whether an (owner) management company is properly run in terms of formalities e.g. hold AGM, take minutes etc.

Do you pay yourselves the ground rent or have you formally or otherwise waived that requirement?

We have waived it. Am staggered that ppl pay a management company it's so easy, I do occasionally write notes as if we've had a meeting but it's usually on phone conversations as we don't live in the flat it's let out.

I think the big difference is if you have an owner/resident association or if it's a limited company with directors. When we were looking to purchase I wanted to see that proper records had been kept and that there was something of a sinking fund available for future repairs, as opposed to everyone paying up on demand.

Lightening, did you formally waive it - e.g. by resolution or otherwise in writing or did you just agree not to pay it?

I know what you mean about not using a company but if people are very busy you can understand that they perhaps don't even want to touch it.

Also, although it's just us 3 there is one owner whom I have to email a dozen times just to get his annual insurance renewal portion although it's the same time every year and usually the same amount.

I do most of the work and sometimes feel like I'm taken for granted and wonder if it would just be easier to use a company.

Enrique - what you say ties in - I think it would be better to have sinking fund and I may have to initiate this as external repairs are due soon.

I'm a managing agent and I wouldn't self manage on a block of more than 4 flats. There's too much liability involved if anything does go wrong and you need to be quite aware of some legislative requirements that I've found some leaseholders really aren't.

LBOCS what are the common ones that people are unaware of?

We pay a twice yearly amount and pay the insurance and any agreed works out of that amount and we always have a fund. Spent several grand on the roof this year but it was in the fund so no problem. Anyone buying into our little block knows the charge is £500 twice a year it will drop back down once we feel fund is healthy enough. Far too much of a pain to ask for thirds of ins so I would change that maggie When I bought this flat I did look at the way it was run and stipulated from the outset I would do the accounts whilst another owner manages the account pays ins. I prob wouldn't have bought a flat without a fund/ good practices in place.And I do agree the more there are in the block the more chances of one awkward one. If anything new comes up I just Google my legal obligations if we had a non payer for example there is a set procedure to follow same for absent Freeholder. We have yearly gas and electrical safety checks and are just updating the fire regs. Obviously it's also a limited company so would be interested to know any other legal requirements.

Well, the main one is the section 20 consultation requirements for expenditure - if you're spending more than £250 per any one flat, you have to go through a consultation process on the expenditure. Even if the money's there in the bank. If you don't, your leaseholders could perfectly legally say that they're limiting their funding of the works to £250 and the rest has to come out of the directors' pockets. It has been tested at FTT and the consensus is that ignorance of the requirement is not a defence. And because the debt liability travels with the lease not the leaseholder, if you've done work previously with everyone's agreement, then they sell up and there's a new leaseholder, they could still challenge it.

Also, S20b issue - the fact that you can't reclaim any expenditure made more than 18 months previously, which is why it's often so important to get service charge statements of account issued within 6 months of the year end - otherwise if there's a deficit it's unrecoverable.

There is an online self management package which is reasonably new. It's cloud based and developed by a chartered surveyor from a professional managing company who realize that small conversions or units can't spend too much on professional services. It does explain and remind of legal requirements and other leaseholders can also log in to see the state of play.

I usually do a budget and add a fee for repairs plus a surplus and everyone pays monthly by direct debit.

I'm not sure exactly how well it's working so far but if you want a link PM me maggie. I'm not associated with it.

Yes I did know about consultation we always get three quotes and an agreement from everyone in writing to.proceed before getting any work done but our leases do say that as long as money is in the pot two votes I s all that needed. I asked my solicitor when I bought to explain what was needed/how things should be done but good to remember it a legal requirement not just good practice. Luckily we run a very healthy pot that does seem to make things easier.

Also all our leaseholders are directors I see know why my solicitor recommended that. Very interesting thread thankyou

I think our ground rent is a nominal £1 a year and waived but am going to check now

Place marking

Now not know

Lightening, Enrique - if you're still around - do you know if there is legal/statutory responsibility on the freeholder beyond lease requirements (to insure, repair/maintain externals, common parts etc)?

It is sometimes difficult to differentiate my responsibility as landlord of a flat (gas certificate, epc, fire regs etc) and freeholder of the block.

Enrique, how can I find out more about this cloud based package?

The responsibilities of our flat are specificed picked in our lease. We are responsible for the communal upstairs hallway lower ground floor flat for basement outside area. I make sure accounts are done, building insurance and co house paid by one of the other directors out of the pot after first asking all of us to ok the ins quote etc it's all very simple I like to do the accounts takes me 15 minutes but I know it's done then.