Duties and obligations
Management of a residential block of flats is a largely practical exercise and demands considerable effort, time, organisational skills and care. The physical fabric of the building must be regularly inspected, maintained and redecorated to the required standard and at the required times.Assessment of any necessary work may require professional expertise.Monitoring and approving the finished job may demand a qualified surveyor. Work will not always be properly executed and some members or lessees may well refuse to meet the costs at the expense of the company, which can cause friction and dispute.
Systems must be put into place to estimate and to collect the money required for works and services and the company will need a full understanding of how the lease permits the charges to be raised, in advance or arrears. There must be sufficient accounting procedures in place to provide final accounts and the annual statutory summaries to the leaseholders. Although the company is the landlord, the accounts must clearly distinguish between the financial affairs of the company and those of the landlord; for example, the company cannot pay corporation tax from the leaseholders' service charge account.
In cases where a resident is in default of his or her lease, in non-payment or arrears of rent or service charges or in breach of a clause of the lease controlling the use of the flat (subletting, for example), the manager will be required to take action; this can include threat, or ultimate use, of forfeiture and possession proceedings.Resident management companies may feel uncomfortable in direct action against a fellow leaseholder and consider such actions better carried out by an independent professional.