Where is My Service Charge Money Held?
1 October
Leaseholders often want to know where their service charge money is held. The answer should be a simple one, but unfortunately some freeholders and even some managing agents, are not as transparent as you would hope.
At Apex we operate with complete transparency. Our property management software enables our clients to see all the information relating to their client bank accounts, from live bank balances to complete information on income/expenditure, and everything in between.
By law, service charge money must be held in trust – in line with Section 42 of the Landlord and Tenant Act 1987 - and trustees must be either Resident Management Company members, Right To Manage directors, landlords/freeholders or managing agents.
To comply with these requirements:
- Landlords/freeholders should open separate client accounts for each property/scheme they own the freehold of. These accounts should be easy to identify. This is easily achieved by adding the name or number of the property to each new account that is opened.
- Resident Management Companies and Right To Manage companies should also ensure that the client accounts for their property are easy to identify, and named so they reflect the properties name.
- Managing agents, acting on the behalf of other parties, should also open one or more designated bank accounts for service charge money, ensuring they are clearly identifiable with the name of the trust/client.
How do I get more information on my service charge account?
If you would like to get information about your service charge expenditure/account, you have a right to this information as a leaseholder!
You have a right as a leaseholder to request a summary of the service charge account, and to inspect receipt/accounts for the last accounting year (12 months).
To request such information, you will need to write to your landlord/freeholder or managing agent. Within your letter you need to make a request for inspection of supporting accounts, receipts, and other applicable information in accordance with Section 22 of the Landlord and Tenant Act 1985.
