The Government decided in summer 2010 that it would not introduce regulations about the accounting for leaseholders’ service charge monies.
TPI, the Institute of Chartered Accountants for England and Wales (ICAEW), the Association of Chartered Certified Accountants (ACCA) and the Royal Institution of Chartered Surveyors (RICS) cooperated to issue joint guidance on accounting for service charges.
Synopsis
The joint guidance was published in October 2011 and can be downloaded from the TPI website. A revision of the document is currently underway; however, the current version should continue to be referred to until the updated guidance is published.
This Guidance Note summarises best practice for holding and accounting for leaseholders’ monies based on the joint guidance and the RICS Service Charge Residential Management Code (4th Edition).
Managing agents should also be aware that the Leasehold and Freehold Reform Act 2024 introduces a framework for increased transparency and consistency in service charge accounting. This is subject to legislation being enacted and managing agents should regularly review procedures to ensure compliance with future legislative requirements.
Note: References to RMCs includes RTM Companies. References to landlords include RMCs where they are responsible for the collection of service charges.
Covering Topics
- Overview
- Summary of Best Practice
- Bank Accounts for Holding Service Charge Monies
- Deficits, Loans and Overdrafts
- Annual Statements of Account for Service
- Annual Statements of Account for Landlords and RMCs as Submitted to Companies House
- Audit, Certification or Accountant’s Report
- Qualifications and independence of Accountants
- Timescale for Annual Statements of Account for
Service Charges (S.20b)
- S21 Statements
- Further Information
