Who decided on obscure accrual accounting?
Based on my experience, few leaseholders understand accrual accounts. Do you? I’m not too sure managing agents do either. Come to that, I wonder how many Members of Parliament know how to read them and what lies behind them? Continue reading “Transparent Accounting Anyone?”
Why no transparency, huh?
The Government decided in summer 2010 that it would not introduce significant protections designed into the 2002 Commonhold and Leasehold Reform Act relating to the accounting for lessees’ service charge monies.
It seems the lucrative £leasehold caper refuses to be fettered with even basic financial transparency commonly required in other financial services. Instead, the ICAEW allegedly introduced a ‘binding’ code of practice (Tech 03/11) for accounting for service charges, but this code does not ensure billing transparency for those required to pay all the bills. Continue reading “Service charge Billing”
The first rule of the £leasehold caper is the freeholder must pay nothing.
For the freeholder to pay would be outrageous. The freeholder may buy the freehold for less than 2 to 5% of the total value of the land and buildings and thereby own the reversion interest in the buildings – that will do nicely – but they must never be expected to pay for anything, the courts would howl with derision and dismay. How unfair!
Given the nature of leasehold, there will be communal costs. Things like building insurances, building maintenance, grounds maintenance, cleaning etc. There may be old boundaries that have seen no repairs for a hundred years prior to the infill leasehold development. Never mind, the lease will make clear that the leaseholders have to pay an equal apportionment of all the costs, old boundary and all. Continue reading “Service charges – what’s the fuss?”