Finberry Estate Q&A September 2020

This page is dedicated to the residents of Finberry Estate and is in relation to a recent letter we issued on behalf of our client dated the 28th August 2020, which contained accounts for the period of 1st January 2017 – 31st December 2019 (3 years) and the budget and demands for 1st January 2020 – 31st December 2020.

These documents contained a covering letter, which provided some insight into these charges but it is clear that this letter and the demand has caused some concern and frustration amongst residents at Finberry Estate.  

We would like to offer our apologies for the confusion and distress that this letter has clearly caused some residents. Owing to the significant response and to provide further clarity on the reasons these demands have been issued, we have compiled a FAQ to answer the many concerns that have been raised about the recent demands. We hope this will help clarify our position as Managing Agent, and our client as the Residents Management Company, further.

Initially, we wish to explain HML’s position as Managing Agent. HML are instructed to act for and on behalf of our client Finberry Estates Management Limited. This Residents Management Company will be made up of residents of Finberry Estate (Currently the Directors of this company are employees of Crest Nicholson) and must abide by the covenants inside the respective leases and TP1s (the Transfer of Part of Registered Title Form, also known as the TP1 Form is the critical form your property lawyer provides to the Land Registry which details the transfer of the newly-created land/property title. This TP1 form is where reference is made to any rights of way, easements or restrictive covenants).

We have been instructed to assist with the management of the development in accordance with the terms of various leases and TP1s at Finberry Estate and we act in accordance with our client’s instructions; HML, as the Managing Agent, are not decision makers during this process, we only advise, recommend and facilitate.

Once again, our sincerest apologies for the upset our communication has caused. We are taking your concerns very seriously and if you do have any questions beyond those listed below, please do not hesitate to get in touch.

Why has it taken HML so long to issue a demand to us?

This has been a problem since Finberry was first occupied. It has become clear that the problems which affected the budgeting and accounting process pre-dated HML’s management. We conducted a recent review, in discussion with Crest Nicholson, where we demonstrated to Crest Nicholson that previous budgets and billings were not correct, and whilst we had attempted to bill using the correct methodology, all this did was cause more problems. To remedy this, we have taken the last 6 months to audit every household’s liabilities, according to the date you completed purchase, what estate costs have actually been charged, what you should be paying as set out in your lease or transfer document, and what payments, including completion monies, you have made. To be clear, your liability starts from the date your purchase completed.

We have completed the auditing and approval process for the 2017, 2018 and 2019 accounts and 2020 budget during this time too. These accounts and budget were issued in the recent billing, and they showed charges or credits which were applied to your bill. This, along with your completion of purchase date gives your ‘starting balance’, and what your contribution to the finances of the estate will be.

My contribution to the service charge is more than what I was told by the Crest Nicholson Sale Team, why is that?

We understand that some residents have raised concerns regarding what they are being asked to pay because this is different to what they were advised the charges would be by Crest Nicholson during the sale process. Unfortunately HML and our client, Finberry Estates Management Limited, have no involvement in the sale, building or planning phase of Finberry Estate and we are only instructed to assist our client to manage what is in situ when the development has been completed.

Concerning the actual charges that have been demanded, it is common for service charges to be demanded in advance, based upon an estimation of the costs in the coming service charge year. This is to ensure that funds are available to enable us as the managing agents to assist our client with the management of the development in line with the lease and TP1 requirements. At the end of the financial year, the service charges accounts will then the audited or certified depending upon what it required by the lease or TP1. The actual accounts will then be issued and, dependent upon whether the accounts are in credit or deficit, a balancing charge may be requested from leaseholders or a refund may be issued dependent upon the terms of the leases and TP1s.

Section 20B; what is it and why did not all homeowners receive it?

We note that a considerable amount of residents are referring to Section 20B of the Landlord & Tenant Act 1985 and stating that any charges older than 18 months are not due.

The reason for this is because under Section 20B of the Landlord and Tenant Act 1985, our client has 18 months within which to notify you of service charge costs being incurred or demand payment from you. If our client fails to either notify you or demand payment within 18 months they will not be able to recover the charges from you.

We appreciate that the 2017, 2018 and 2019 accounts and the respective balancing charges are outside of this 18 month rule, however, we can advise that we issued summaries of total service charge costs to all leaseholders in accordance with the below:

  • Year Ended 31st December 2017: Section 20B notice issued on 29th June 2018
  • Year Ended 31st December 2018: Section 20B notice issued on 26th June 2019
  • Year Ended 31st December 2019: Section 20B notice issued on 30th June 2020

These Section 20B notices enclosed a preliminary summary of total Service Charge costs recoverable from the lessees relevant to the financial year; the summary of costs might have been subject to amendment and adjustment following completion of the accounts.

However, the notice clearly advised that you may be required to contribute towards those costs in accordance with the terms of your lease to the extent to which they exceed the total demanded on account.

The notices advised that a demand may be issued upon completion of the annual certification process of the accounts in accordance with the terms of your lease.

We believe that all leaseholders have been notified of the service charge costs being incurred inside the 18 month rule as the Section 20B notices were issued within 18 months of the first day of the respective financial year.

Please be advised that Section 20B only applies to leasehold houses or flats and does not apply to freehold properties. As the freehold houses on Finberry Estate are not tenants Section 20B does not apply, however, we do believe that all freehold houses were sent the above Section 20B notices and therefore advised of the preliminary summary of total Service Charge costs recoverable as we believe this is best practice.

Why has our contribution risen from 2017 to 2019?

You only pay from the start of your completion date (i.e. the date your property purchase legally transferred ownership to you) to the year-end being 31st December of that financial year and then in 2018 and 2019 you pay in full rather than a part year of service charges

As mentioned previously, we have provided all years accounts from 1st January 2017 – 31st December 2019 and these outline the exact costs incurred and have been used to calculate your contribution which starts from your dates of completion.

Unfortunately, HML and our client, Finberry Estates Management Limited, are not involved in the sales of the properties and are budgeting for the services that our client must provide in accordance with the TP1s and Leases. We are not able to comment on what you were advised your contribution was before purchasing your property.

Who is the client that you refer to and who approves the service charge budget?

We note your concerns regarding the budget not being approved by residents and therefore not agreed. Please be advised that the letter dated the 27th August 2020 is charging in accordance with the relevant Leases and TP1s and approval of the budget by all residents is not a pre-requisite of the amounts being owed to our client.

The principles of the Residents Management Company (RMC) and our client, Finberry Estates Management Limited, are to maintain the communal areas to ensure finance is in place to carry out these roles and ensure all other aspects of the quiet enjoyment and occupational restrictions are met. The current Directors of this company, and therefore our client, are Crest Nicholson but when the RMC is handed over to the residents then you will be able to appoint resident Directors.

This creates a board who work as a group to arrange services under the ownership documents and make decisions and consult, where required, on proposals and service delivery with the members. The duties of the Director do vary in complexity according to the size and tenure types of the development but can be outlined but not exclusively to:

  • Agree the Budget to run the development
  • To process litigation regarding debt collection for service charge arrears

The Property Manager acts in an executive position with all the responsibilities of carrying out the day to day management by instruction of an in consultation with the Directors, who act in a non-executive role to ensure compliance and adherence to agreed policy and process.

We have provided the budget and accounts to our client, Finberry Estates Management Limited, which has been approved by them. As the Managing Agent we must take on the role of advising, recommending and facilitating our client’s instructions. We are not decision makers, that is for our client who remain the arbiter and are ultimately responsible for matters concerning the estate.

How do I understand what is included in the estate management charge?

The estate management charge covers the following expenditure: Accountancy, Bank fees, Company Secretarial fees, Public Liability, gardening and management fees. We have provided a link below to the budget which provides further clarity on each budgeted item.

I want to see a full list expenditure to work out whether the figures have been calculated correctly

We appreciate that residents wish to see a full list of expenditure to work out whether the figures have been calculated correctly. At the end of the financial year, the service charges accounts are certified by accountants as dictated by the lease or transfers. The actual accounts will then be issued and, dependent upon whether the accounts are in credit or deficit, a balancing charge may be requested from freeholders and leaseholders or a refund may be issued dependent upon the terms of the lease or transfer.

Whilst it is common for the accounts to be issued within six months of the end of the financial year, should accounts not be finalised within 6 months a Section 20B notice is served detailing the expenditure for the financial year. The actual expenditure for maintenance works will be detailed in the actual accounts and a refund of any funds not spent will be actioned accordingly.

When these accounts are issued, they will explain what has been collected for and expended from the service charge account which you are required to contribute to. We can advise you that all the invoices, expenditure information and income information is passed to an external accountant (not part of HML) and then produced. We can confirm that these accounts will be drawn up in accordance with the ICAEW Technical Release Tech 03/11 for Residential Service Charge Accounts and therefore represent a true amount of service charge expenditure.

Included with the letter issued on the 27th August 2020 were three years’ worth of accounts which were certified by the external accountant. We note that residents have mentioned that evidence needs to be seen in relation to where the monies collected for these budgeted items has been spent. Please be advised that we are able to assist in this regard by offering an opportunity to make an application to view the supporting evidence of the accounts of Finberry Estate now the accounts have been circulated.

This application is usually called a Section 22 application and is part of the Landlord & Tenant Act 1985. Although a majority of residents are freeholders so the Landlord & Tenant Act 1985 does not apply we will accept applications from any resident, Freeholder or Leaseholder, to inspect documents relating to these service charge accounts as a follow-up to provide more detail on the summary in the interest of full transparency.

Please be advised that there is a time frame of 6 months after the accounts have been circulated that you’re allowed to make this application under the Landlord & Tenant Act, so we will be following this as we believe this is best practice.

What is Access Control and why is there an expense at £1200.00?

Please be advised that we believe this query is being asked of a budgeted item and is not an expense. This budgeted item has been set up to cover costs incurred and need to repair private roads or pathways on the estate. The original budget item name that was provided historically but HML will discuss with Crest to see if we can change the budget item names to reflect the actual works needed; we note that in the 2018 accounts it was named “Access Way Maintenance”.

To confirm that there has been no expenditure on this item please refer to the provided 2017, 2018 & 2019 accounts and go to page 3 on the 2017 accounts, and page 4 on the 2018 & 2019 accounts. Access Control & Access Way Maintenance had £1,200.00 budgeted but no expenditure during these financial years.

The service charge demand says 14 days, but I cannot find where it says in my lease/transfer that that is the case

Please be advised that we do not have all the leases or property transfers on file; we only hold those provided by the developer, however, we have reviewed the examples we have on our system and for the leases they state:

The Seventh Schedule, Clause 5. “The Lessee shall pay to the Management Company the Lessee’s Proportion of the Maintenance Expenses in a manner following that is to say:”

The Seventh Schedule, Clause 5.1. “In advance on the usual quarter days in that financial year an equal quarterly payment of the Lessee’s Proportion of the amount estimated from time to time by the Lessor or its managing agents as the Maintenance Expenses….”

The traditional English quarter days are: March 25, June 24, September 29 and December 25. Therefore, we have provided four quarterly demands for the below periods and a service charge apportionment sheet relating to the 01/01/2020 to 31/12/2020:

  • 25/12/19-24/03/20
  • 25/03/20-23/06/20
  • 24/06/20/28/09/20
  • 29/09/20-24/12/20

With the above clauses in mind your service charges are actually due in advance of these quarter days in accordance with your lease.

When looking at the freehold properties and their TP1s they have a similar clause concerning how the service charges should be paid:

The Eleventh Schedule, Covenants in Respect of the Maintenance Charge, clause 11.6 it states:

“Prior to the commencement of each financial year the company shall provide to the transferee an estimate of the Maintenance Expenses for that financial year and of the Transferee’s Proportion therefore which the Transferee shall then pay to the Company by equal quarterly payment in advance on the usual quarter days in that financial year on account of the Transferee’s Proportion of the Maintenance Expenses for that financial year”

I am going to struggle to pay the total amount in one go, what are my options?

Concerning residents that are unable to pay the total amount in one go, we understand the apprehension with being asked to pay the outstanding amount in 14 days, especially with the current financial climate.

Inside the covering letter for these demands it stated that we appreciate that residents may not be in a position to pay immediately, so we raised this with our client, and suggested free of charge payment plans should be offered. The client agreed and instructed us to offer a four-month payment, until the end of the financial year, i.e. September to December 2020.

I have received a demand for a period that I did not own the property, why and I being asked to pay it?

When purchasing a property with Service Charges, there are occasions where the solicitor acting for the purchaser will negotiate with the solicitor for the seller to retain funds. For example, the most common scenario is where the Service Charge Accounts for the end of the financial year have not been finalised, and the previous accounts show a deficit in funds is likely to occur.

When a purchaser agrees to purchase a property with Ground Rent and Service Charges, the date for completion often falls before the annual account is finalised for the Service Charges. This means that the Management Company provides an estimated account, based on the income and expenditure of the previous years. Sometimes this estimation will be incorrect, and the Management Company will spend more than estimated, or in some cases they may spend less. If the Management spends more than predicted, when the accounts are finalised for the year, the deficit will be divided amongst the Leaseholders and Freeholders. This means that each of the Leaseholders and Freeholders will be required to pay their share of the deficit. Alternatively if there is a surplus in the Service Charges, this may be divided between the Leaseholders and Freeholders, or simply deducted from the next year’s payments.

When solicitors agree to retain funds they will draft a Special Conditions clause to be inserted into the contract. This Condition will contain details about which solicitor is responsible for holding the agreed sum, how the funds to be calculated and when the funds are to be released. Often there will be a specified time limit for the fund’s retention. The solicitor responsible for holding the funds must hold them in an identifiable account which meets the Solicitors Accounts Rules (these can be examined on the Solicitors Regulation Authority webpage.) Once the terms have been met then the funds can be divided between the purchaser and the seller, if necessary and distributed to the correct parties in accordance with the agreement.

The retention of funds means that when the completion monies are paid on the date of completion, they will be less the amount agreed for the retention. Normally, the solicitor responsible for retaining the funds will be responsible for receiving the final accounts and calculating the distribution of the monies, although this may differ depending on the agreed Special Conditions. Once the accounts have been received, the solicitor will note whether there was a Service Charges deficit and if so, how much of this occurred during your ownership of the property.

If there was not a retention agreed between the previous owner and the solicitors then unfortunately the service charges are still owed by the current property owners as the debt says with the property even in the event of new ownership.

Will I be charged interest or late payments fees if I do not pay?

Please be advised that there is also no obligation on us to issue you with reminders as the money has been demanded and is owed as per the leases & TP1s. If the charges are not paid HML will not charge you any interest or arrears management fees but we have agreed with our client inside our Management Agreement that we are able to issue a First and Final Reminder.

We will charge our client for issuing the first and final reminders in accordance with our management agreement and the amount charged to our client will be recharged to you. We understand your concern with the potential for fees being incurred, however, we have advised we will not be sending reminders until we have answered all residents queries with this Estate wide communication.

After this letter is sent if a resident does not pay for these budgeted costs this could result in reminders being issued; we must recover the fees incurred as a result of taking the necessary enforcement steps in line with the transfers and leases. HML in our capacity as managing agents do not make charges or allowances for the work to be undertaken in collecting late or unpaid amenity charges within our basic management fee. As doing so would penalise those that pay their charges promptly and in accordance with their leases and transfer terms.

We will now explain the process behind our fees which have been charged to you as a resident of Finberry Estate. Our credit control team process before issuing a final reminder is to check all statements and notes, to check with our legal & company secretarial department to ensure no sale/repossession/probate being dealt with. They then refer to the property manager who will check to ensure they have had no queries raised which may prevent payment.

Once authorisation is received and on the day of issue of the reminder all notes and statements are re-checked with a final check with the finance team to ensure no payment has been received and not yet posted to the account. All this additional work is carried out due to late or non-payment. The basis of the computation of the management fee charged for late payment is to cover the costs of chasing the applicant for payment and includes photocopying costs, postal costs and labour costs.

Unfortunately, if payment is not forthcoming after two reminders are issued our client might instruct us to send accounts to Property Debt Collection which can incur additional charges which will be made clear on our reminders if they are sent.

I am unhappy with COVID-19 and how it affected people that you have issued a service charge demand

We understand that COVID-19 and the recent pandemic has affected people and their finances.

Unfortunately, we must continue to demand service charges in accordance with the transfers and leases now we have resolved the financial issues experienced to allow our client and us as Managing Agent to continue to provide necessary services at Finberry Estate. If residents do not pay then it will not be possible to provide these services, leading to potential risk factors such as:

  • Expiry of building’s or public liability insurance.
  • Cessation of utility provisions such as communal electricity, gas & water.
  • Communal area cleaning, which is especially vital during a pandemic.

We appreciate that this might not be what you expect, especially given the news coverage of apparent protection to be awarded to ‘tenants’, but the position is that none of that applies to residents liable to pay service charges.

You are required to pay in line with your contractual obligations as set out in their lease or TP1, however, as mentioned above, we have afforded a free of charge monthly payment plan over the next four months and we are course open to hearing from residents who are willing to try to resolve a payment issue if COVID-19 is a factor effecting their finances.

I am not happy with the demand and I want my account placed on hold

HML have negotiated with our client that accounts can be placed on hold meaning that no extra charges are added for late payment until such time as answered questions have been provided to declare payments that are due will need to paid and after taking instructions from our client. HML are tasked with advising residents that balances should be cleared by the end of 2020. Without your payments the various services and contractor that work on Finberry Estate cannot be paid.

We are being charged for cleaning but have not had anyone to clean our block

For those residents who live in blocks – Contractor cleaners have been in place since HML took over the management and that is what we are billing for, we cannot comment on what was in place prior to our contract.

We regret to hear that some residents are disappointed with the cleaning of their blocks; this answer will explain what we can do to assist if there are concerns with the services being provided by the appointed contractors. In accordance with the Association of Residential Managing Agents (ARMA) we are required to have a process that ensures contractors are qualified and able to carry out the work that we instruct them to carry out on behalf of our clients.

This is the purpose of our Contractor Accreditation Scheme (CAS) and after the contractor is approved the checks should have confirmed that they are members of trade bodies and have the appropriate qualifications to hopefully ensure the quality of work which will be carried out by them is of a high standard. Unfortunately, we are not able to guarantee contractors work once they are approved so works where possible should always be checked by the property manager and to include photos as evidence of the work.

We are contracted to visit the property and inspect the communal areas as required; this is our main mechanism to check work is completed and up to standard. We do rely on reports from residents and other contractors to report poor standard of work when it regrettably does happen.

If there is a complaint about the standard of work or damage caused, the Property Manager should endeavour to resolve the complaint by inspecting the work (if not already inspected), taking photographs and liaising between contractor and the person who raised the complaint and the client if appropriate.

Where the Property Manager is unable to resolve the complaint the formal HML complaint procedure should be commenced. All complaints should be dealt with promptly to avoid further escalation. All complaints concerning contractors should also be sent to the Essential Services team so that it can be linked to CAS.

We can confirm that this process is being used on a regular basis regarding Finberry Estate and when a concern is raised it is discussed with the contractor. If of course there are concerns regarding various areas of maintenance, please do not hesitate to contact your property management team.

Why should I pay when you have not maintained the site properly?

For all the internal and external areas that HML are assisting our client to maintain we have put in place applicable contracts to undertake all the requirements of this estate. For further information on actions taken with this please refer to the answer to number 15 above, but to confirm, we regularly visit the estate to ensure that all actions that should be taken are taken and if there are any areas that need action we promptly raise these with the applicable contractor.

It is our view that the areas HML are assisting our client to manage are properly maintained and also accordingly the documentation that you signed on your purchase, you are legally obliged to pay.

Why do we pay for refuse collection when such costs are included within our council tax?

This query is concerning another budgeted item not an expense. This budgeted item is to cover the cost of extra litter collection and bulky items dumped on management areas or clear up health hazards for example broken glass bottles, excessive animal faeces etc. It was never intended that this item would cover or contribute to the regular refuse collections undertaken by the local authority.

With the above in mind we have reviewed the 2017, 2018 and 2019 accounts and when looking at page 3 of the 2017 accounts and page 4 for the 2018 and 2019 accounts we have budgeted £400.00 for the financial year towards Refuse Collection but not spent anything during these financial years.

However, taking your feedback in to consideration HML will consult with our client renaming some of the budget items to avoid future confusion.

We were told by Crest Nicholson that we would be contacted by HML to set up a quarterly payment plan, why has not happened?

HML unfortunately were not advised by Crest that we needed to contact owners to agree a quarterly payment plan. We believe the way we are demanding the recent charges and how we have asked for them to be paid is explained above in answers 9 & 3.

Why are some of us paying into more than one service charge fund?

In the case of Finberry Estate there are 10 different service charge schedules. Every owner will contribute to the estate charge schedule and for those that are flat owners you will have your respective schedule for your block and for those that own the commercial units there will have a separate schedule. Each schedule has an apportionment split amongst residents that contribute towards it.

I paid my service charge when I bought the property, why am I being charged again?

When purchasing a property, whether it is a brand-new property or not, the service charge will have already been calculated for the year. This amount will be apportioned on what your lease or transfer deed for the property states. It is the original developer or freeholder that sets the apportionment.

There isn’t a standard method for all when it comes to setting an apportionment with a variety of methods currently in use in England and Wales, however the most commonly used apportionment methods are: Floor Space, Bed space, Rateable value and Equal apportionment. It does not fall to the managing agent to set or agree the apportionment but the developer or freeholder.

Where a property is purchased part way through the year the conveyancing solicitors will calculate the amount owed by the previous owner and what the amount will be due by the new owner. This, however, will only be calculated for the period defined. In the case of Finberry, the charges should be issued quarterly in advance. For those purchasing directly from the developer, as soon as the first property is sold the service charge liability becomes applicable. Where a service charge has more than one schedule, all schedules will become active. This will create what is known a Void charge. The void charge is payable by the developer to ensure the full amount of monies is paid to the corresponding schedule. This will often cause a delay in funds being made available as the developer completes there sales of the plots in blocks, sometimes these blocks can have 20 to 30 properties all completing at the same time “known as block completions.”

With the above in mind, the completion monies that were paid were for only the demands outstanding at the time and in accordance with your Lease or TP1 we must continue demanding on behalf of our client.

There are several properties that have not yet been sold, what happens to their apportionment of the estate costs?

Until a property is sold and legally complete the costs involved in that property are charged to the developer.

My transfer deeds state the charges should be a fair and proper proportion, I don’t think the costs are fair and a proper proportion!

As instructed by our Client, Finberry Estates Management Limited, each household has an equal proportion of the budget schedules that they contribute towards. This was set up prior to our management and in general terms, this is usually something that is completed by the specific developer for each site that they build. This information is communicated to the purchaser during the sales process and we as management agent are tasked with implementing this.

To be clear, the proportion is not something that we set. In general terms, we follow the guidance set out by RICS and ARMA to produce a realistic budget at the end of the year. The Accounts are produced and review which show the actual spend. At this time, your contribution in the budget is reviewed against what was spent and should there be an underspend, you should receive a surplus back in accordance with the terms of lease.

Maintenance expenses shall be ascertained and certified by certificate signed by a suitably qualified chartered accountant, so soon after the year end of the company’s financial year as practical. So why has there been delays in getting the accounts out?

You may have received correspondence and invoices from us, but during a recent exercise we concluded that these may not have been correct, dating back to before our management. To remedy this, we have now audited every household’s liabilities, according to the date you completed purchase, what estate costs have actually been charged, what you should be paying as set out in your lease or transfer document, and what payments, including completion monies, you have made. To be clear, your liability starts from the date your purchase completed.

Why have we not received the service budget prior to the service charge year?

When the budgets were drafted, they were not approved by Crest and that meant HML could not distribute them.

I am in the process of selling my property, why do I need to pay the entire of the 2020 service charges?

Although, the property is being sold, the service charges are still due but will be apportioned on completion by your solicitor. So, you will only pay up to the period of your ownership.

I am not happy with the situation and I have contacted Crest Nicholson, but they referred me back to HML, why?

HML have been appointed to assist our client, Finberry Estates Management Limited, to manage Finberry Estates and so we are your point of contact on all matters relating to the Finberry development.

I own my freehold, why am I receiving a service charge demand?

Although, you own the freehold of your property, the land surrounding the property forms part of the Management Company called Finberry Estate Management Limited to which you are a member and by purchasing the property agreed to contribute towards the upkeep of the communal areas at Finberry Estate. Your responsibilities regarding your contribution are outlined in your TP1 transfer which accompanies the property.

My husband has contacted you to discuss this matter but was told that HML could not discuss the account with him, why?

Due to the General Data Protection Regulation (GDPR) we are unable to discuss the account with anyone that is not listed as the owner or where owners have not given written approval for a third party to act on the account owner’s behalf.

Why are we paying for communal lighting, the only lighting is in the street, shouldn’t that be covered by my council tax?

There are streetlights on the development which belong to the management company and are not maintained by the Council, the cost of electricity and the maintenance and upkeep of these forms part of your service charges.

What is the difference between company accounts and service charge accounts?

In order for service charges to be collected officially, we are required to form a company which for this development is known as Finberry Estates Management Limited and although it is a not a company set up for the purpose of profit and loss, we are legally obliged to file annual accounts with Companies House. Service charge accounts are prepared in order to send owners a summary of all expenditure incurred during the financial year.

Why should I pay for public liability insurance?

Public liability insurance can cover legal costs and compensation payments if your Residents Management Company is held responsible for injury or property damage to a client, contractor or another member of the public on any part of the land, buildings, pavements, road etc. that the resident management company is responsible for. The budgeted item is not coverage for your Managing Agent or Freeholder who will hold their own cover.

Why was it not explained to me what my responsibilities are?

When purchasing your property, your conveyancer/solicitors has a duty of care towards you as their client. It is their responsibility to explain what you are purchasing from the documents that the developer or previous homeowner has supplied. If there is insufficient information your legal representative will seek further clarification or make their own searches before recommending that you proceed with the purchase. We recommend that if you have any doubts about your purchase you should seek clarification from your own independent legal adviser.

Why should I pay for gardening I don’t think it is being done properly?

There are still some parts of the estate that have not yet been handed over by the developer. As part of the phased handover we will carry out an inspection alongside the developer. We are aware, as are the developers, that some areas that are still the responsibility of Crest Nicholson that will need replanting or replacing before handover will be accepted.

Please also refer to answer 15 concerning how we manage the contractors appointed to maintain the areas which are currently under our clients responsibility.

What is included in other professional fees?

Other professional fees cover the cost of HML carry out the management companies company secretary liabilities. This includes but is not limited to:

Maintaining the statutory registers. These are:

  • The register of members;
  • The registers of directors and secretaries;
  • The register of directors’ interests;
  • The register of charges;
  • PSC Register (“People with Significant Control”).

Locating the registered office at HML Company Secretarial Services’ business premises;

Maintaining the records in paper form, and within bespoke data management systems for all current records. Cost of archive storage of paper records subject to charges as per the Schedule of Charges.

Ensuring that the statutory forms are filed promptly, or inform the reasons for the delay and encourage resolution of that delay.

Establishing and arranging general meetings, liaising with directors and providing members and auditors with notice of such meetings.

We received the demand for payment 6 days into the 14-day payment terms, can we get an extension?

Yes, as per our letter that was issued with the demand, a repayment plan has been offered.

Who is responsible for approving the annual service charge budget?

HML PM Ltd acting as managing agents on behalf of the Residents Management Company will prepare the budget and seek approval from the client, in the case of your estate the client being Finberry Estate Management Limited. Please refer to answer 5 for a more detailed response.

Why do I have to pay the 2020 charges now? Can I wait until the year end and once the 2020 accounts have been compiled?

The service charge is charged in advance, whilst we appreciate that the 2020 service charge has only just been issued, it is a requirement that payment for such charges is in advance.