Question 1

MANAGEMENT ACCOUNTS PREPARATION

Accepted Answer

All companies must keep records of their financial affairs. No company can be efficiently run if their financial affairs are not kept up to date and constantly monitored. We will provide monthly, full management accounts for you. We also appreciate that not everyone is an accountant, therefore we will produce easy to understand details of the following:

Balance per unit: showing you who has paid their service charge, when it was paid, and any outstanding balance 
Details of all orders and/or services received, the amount spent and with whom. This will provide you with the information required to see exactly where your money is being spent 
Full profit and loss for the financial year, broken down month by month. You will also have details of your budgeted figure for the year so you can compare actual spend against your budget 
The balance sheet, showing an up-to-date position of the financial state of your management company

At the end of your financial year, we will prepare your accounts to be passed to independent accountants for the production of audited or certified accounts, whichever is appropriate.

Question 2

ANNUAL BUDGETING

Accepted Answer

As the cost of upkeeping your property is met by you and your fellow lessees, there will only be a certain amount of income per annum. This is normally divided equally amongst all lessees. It will need to be of a sufficient amount to cover planned expenditure for the year to come, taking into account extra unforeseen items. It will also need to cover major pre-planned exceptional items such as external decorating. These latter items may be items that will not take place for several years. Rather than pay for them in one year, it is prudent to save by way of a reserve or sinking fund. We will therefore agree an annual service charge level to reflect your needs and circumstances. We will make a service charge recommendation but the final decision as to how much each lessee will be charged will rest with you. You and your fellow lessees can help keep the cost of the service charge to a minimum by avoiding unnecessary expenditure. Good communication will help improve the management of your property. This will ensure that funds are used for their intended purpose rather than wasted on unnecessary expenses. Economical use of service charge funds can be helped by:

Prompt notification of the need of repairs 
Ensuring that all service charges are paid promptly at all times 
Ensuring that items such as lifts, communal phones etc are treated properly and with care 
Taking collective responsibility for the common parts of your properties and not allowing them to be misused. An example might be bin areas being used for the disposal of freezers and refrigerators. Their removal will attract a council charge 
Making claims on buildings insurance because insufficient care has not been exercised e.g.  tap, waste and roof leaks

Question 3

SERVICE CHARGE INVOICING AND COLLECTION

Accepted Answer

Once we have agreed and set the annual service charge, we will invoice all lessees accordingly. Some leases will have specific periods in which service charges must be invoiced. Statements of account will also be provided for individual lessees where appropriate. Normally, we will invoice lessees as per the terms of the lease, with payment due immediately. With your agreement, we can set up payment profiles that suit you and your fellow lessees, such as monthly payments by standing order. Each company will be different in respect of its financial year, your quarter will be dependent upon when your financial year starts and finishes. We can, with your agreement and within current legislation, change your financial year to suit you. All lessees will be given a reasonable period of time in which to pay their service charges. If, however, they have not paid, we will actively pursue payment of all fees due. We believe that it is not fair on fellow lessees who have paid their fees fully for others to enjoy the benefit of those fees and not to make their own payment. We will use relevant clauses within your lease (where applicable) to ensure fees are paid promptly.

In any company, cash flow is a key issue, and this will be no different for your management company. Once we have exhausted all avenues at our disposal to recover any outstanding fees in a sensible, amicable manner, we will prepare the necessary paperwork to pursue the matter through the courts and will also ensure that any costs involved will also be recovered in as short a time as possible. In such cases, the detachment and independence of a managing agent like HMS can be a godsend to directors because it removes any personal aspect from the running of the management company.

Question 4

BANK ACCOUNT MANAGEMENT

Accepted Answer

All blocks that we manage on behalf of a client operate with a client bank account(s) for the collection of service charges and the payment of invoices.

This bank account(s) is ring-fenced and is for the exclusive use of the client. We never co-mingle clients’ money.

Any interest earned on our clients’ money is paid to the service charge fund and never to ourselves. It is not our money.

We undertake the reconciliation of the account and the use of our cloud-based property and accounting system provides reassurance to our clients because all accounting is transparent.

The above operates for the large majority of our clients and follows the wishes of the clients.

A handful of our clients also have their own bank account. The signatures on such accounts will be the directors of the client company and perhaps some HMS employees. The mandate for taking money out of the account is usually a minimum of two signatures with one being a director of the client company.

If a client wishes to manage the service charges entrusted to it without HMS involvement, we will usually be able to find a way to operate a satisfactory system that works for both parties.

Question 5

COMPANY SECRETARIAL SERVICE

Accepted Answer

We can act as company secretary for your management company, fulfilling all the required duties as set out in the Companies Act 1985. This will include:

Ensuring that annual accounts are delivered within the correct timescale to Companies House 
Completion of statutory annual returns and filing at Companies House 
Completion and filing of all company directors' appointments, resignations and changes of address at Companies House 
Maintenance of your company’s statutory books 
Provision of new share or membership certificates when properties are sold
Arranging the company Annual General Meeting, being present at that meeting, and producing minutes
Dealing with notices made to the company

Question 6

PROPERTY INSPECTIONS

Accepted Answer

We will carry out inspections of the communal areas of your property, both inside and out. These inspections will be carried out approximately every 6 weeks and will be carried out at a variety of times during the day, including evenings. Our inspections are very thorough. We live in an increasingly litigious society, therefore all aspects of health and safety are taken into consideration when we carry out these inspections.

We will report the results of inspections to you promptly in order that any defects that may need attention can be considered and, if deemed appropriate by you, made good. As a result of regular inspections, we will be able to anticipate future problems. This will enable us to help keep expenditure to a minimum and will also ensure that both a high standard of safety and the aesthetics of your property are maintained. Unlike you, we do not see your property every day, so we actively encourage all lessees to report any issue as soon as possible. This will enable us to act sooner rather than later and thus keep necessary expenditure to a minimum.

Question 7

SUPPLIER SOURCING

Accepted Answer

We will arrange suppliers for all the services that your property requires. This includes:

Cleaners for the internal common areas of your property
Window cleaners for any windows in common areas of your property 
Gardeners for the gardening and upkeep of your grounds 
Specialist engineers for the maintenance and servicing of installations such as lifts and electronic gates
General maintenance and repair technicians for any common parts of your property, as well as the structure of the building

If you have existing suppliers that you wish to continue with, we will not seek to change them. We will, however, provide alternative quotations where other options may be considered. We will also provide our professional recommendations upon any services received. All contracts and suppliers will be discussed with you before any decisions are taken. We believe that you should have a say in how your money is spent, which is another reason why you should have control over your own bank account.

If a major project needs to be undertaken, for example, external decorating, we will agree with you exactly what work is required. We will then provide at least 3 quotations for your consideration before any work is undertaken (please note, for arranging and supervising major items of expenditure, an additional charge will apply and certain legal processes - including giving notice of the intention to undertake major works - have to be given to fellow lessees). We aim to ensure that you are provided with value for money from all suppliers (ourselves included), and we will never compromise our independence. We confirm that we will never receive commission or any other form of payment from any supplier. We will judge each supplier on their merits, the service they provide and the charges involved. We are proud of our reputation, we represent you alone, and we act independently on your behalf at all times.

Question 8

MAINTENANCE SUPERVISION

Accepted Answer

Over time, we have built up good relationships with suppliers. However, even though these good relationships exist, one cannot be complacent and it cannot be assumed that all work carried out on your behalf will be to our and/or your satisfaction. We constantly monitor the performance of all suppliers to ensure that they carry out their services in a timely, efficient and cost-effective manner. We treat your money as our own - we know that we would not like to pay for a poor service or performance, why should we treat your money any differently?

Our regular inspections will ensure that we are monitoring all suppliers. However, you can be of assistance to us and report any matters that you consider may be of relevance to ensure that the service being provided to you meets your requirements and expectations.

When major works are required, we will meet potential suppliers on site, and we will go through exactly what work is required with them. Before any major works are undertaken (unless they are an emergency), we will give as much notice as possible to all lessees. The successful supplier will then be monitored on their performance throughout the work.

Question 9

INSURANCE COORDINATION AND OTHER SERVICES

Accepted Answer

Under the terms of your lease, the management company is usually responsible for insuring the main structure and associated grounds. Please note that the master buildings’ insurance policy will not be providing cover in respect of lessees' own contents and may not cover communal items, such as carpets, unless specifically requested and stated. Lessees should, therefore, ensure that they have adequate cover in place (this may be a condition of the lease). We will ensure that a master buildings’ insurance policy is always in force with appropriate levels of cover for all eventualities.

Like any type of insurance, claims must be made within certain timescales. Therefore, any reportable incident that may involve insurers should be reported to us without delay.

We will then coordinate matters and liaise with all other parties as appropriate. In certain cases, an additional charge may be levied by us to reflect the amount of work necessary. You will be made aware of any additional charges before the work is undertaken. We will also ensure (subject to your approval) that insurance on major items such as lifts is in force as appropriate. These items will not be covered by your master buildings’ insurance policy and it is worth noting that this type of equipment is very expensive to replace. By effecting insurance, you will be covered against having to make very large payments to replace parts in the event of failure. The cost of this insurance will be in addition to any routine maintenance charges on the equipment. For related insurance policies to remain valid, it will be a condition that routine equipment maintenance is in place.

Whilst it is not a legal requirement, we normally suggest that you effect Directors & Officers’ Liability insurance. In today's society, company directors are being held increasingly responsible for the decisions they make. Directors and officers of companies must deal with areas such as discrimination and harassment. It is easy to make a simple mistake when carrying out director duties. Claims can arise from shareholders (your fellow lessees), creditors and regulatory bodies to name a few. We are not attempting to alarm - we just consider that it may be prudent for you to have this cover in place given the litigious society in which we live today.

Although we coordinate your insurance coverage, we do not wish to compromise our independence.

Currently, we choose not to be regulated by the Financial Conduct Authority (which would increase the fees we charge you but allow us to undertake additional insurance-related work) but instead direct you to a reputable independent insurance intermediary to arrange insurance and handle claims. To maintain our independence, we do not receive any commission for the coordination of insurance, but the independent intermediary does receive commission from the premiums that you pay (to recompense them for their time and skill). We coordinate the re-broking of insurance coverage each year, thus enabling the best possible cover at a competitive premium. Because we introduce business to the intermediary, the commission that may have been offered to us as an 'introducer's commission' is used to reduce the premium paid out by clients. On an annual premium of, say, £2500 for buildings insurance, the saving could amount to about £375 (15%).

We can provide free quotations on request for any service that you may wish to delegate to us which is not already included in our standard current annual fee of £170 per apartment/flat.

PROFESSIONAL PROPERTY MANAGEMENT IN PORTSMOUTH

COMPREHENSIVE PROPERTY MANAGEMENT FOR RESIDENTIAL COMMUNITIES

SIMPLIFYING MANAGEMENT RESPONSIBILITIES

MANAGEMENT ACCOUNTS PREPARATION

ANNUAL BUDGETING

SERVICE CHARGE INVOICING AND COLLECTION

BANK ACCOUNT MANAGEMENT

COMPANY SECRETARIAL SERVICE

PROPERTY INSPECTIONS

SUPPLIER SOURCING

MAINTENANCE SUPERVISION

INSURANCE COORDINATION AND OTHER SERVICES

SUPPORTING RESIDENT MANAGEMENT COMPANY DIRECTORS WITH EXPERT GUIDANCE

GREATER VISIBILITY THROUGH OUR ONLINE MANAGEMENT DASHBOARD

PROTECTING RESIDENTIAL DEVELOPMENTS THROUGH PROACTIVE MANAGEMENT

FREQUENTLY ASKED QUESTIONS

What information should directors have access to when overseeing a residential development?

Why is preventative maintenance important for residential developments?

How can professional property management support regulatory compliance?

What role do regular property inspections play in effective management?

MAKE MANAGING YOUR PROPERTY EASIER WITH HMS PROPERTY MANAGEMENT SERVICES. CALL NOW ON 023 8168 1069