Flats 3 & 4, 3 Derwent Road West Liverpool L13 6QP MAN/00BY/LSC/2019/0099
DECISION
[19]Insofar as the Tribunal is concerned with the actual expenditure in the years under consideration it is able to say that much of the expenditure is clearly reasonably incurred at reasonable cost if the stated accounts of the Respondent are taken at face value. The Tribunal could see nothing in what was suggested by the Applicant that would seriously challenge that conclusion.[20]To provide a clear analysis of what it found the Tribunal sets those accounts out, as found in the Respondent’s bundle at page 60 onwards, in a slightly amended form, below; the Tribunal notes that the amount spent under the head of insurance represents two years’ premiums and a valuation fee of £1,2oo.00. the average premium being £1o25.50 for each year. May -16 May-17 May-18 May-19 Management 625.00 392.00 693.00 900.00 Added management 33.00 58.00 Insurance 3251.00 973.00 1027.00 Insurance revaluation 1200.00* Light & heat 175.00 (350.00) Cleaning 590.00 724.00 756.00 640.00 Repairs & maint. 1194.00 345.00 5755.00* 605.00 Accountancy 900.00 120.00 240.00 240.00 Directors’ insurance 138.00 140.00 125.00 Sundry exps (145.00) 40.00 39.00 H&S assessment 420.00 Statutory costs 438.00 514.00 Arrears chasing fees 5.00 Legal & professional 1200.00* 90.00 Bank charges 9.00 Totals 6910.00 2424.00 9493.00 4247.00[21]Those amounts are, from the Tribunal’s viewpoint largely reasonable and appropriate for the nature of the property under consideration: a single block containing 4 flats.[22]There are however a number of matters that concern the Tribunal some of which arise directly from the matters raised by the Applicant and others from further consideration of matters subsequently identified from consequential examination of expenditure in the relevant years.[23]the Tribunal is of the view that there appears to be a striking similarity between the insurance revaluation cost in the year to May 2016 of £1200.00 and the subsequent appearance the following year of the same amount, this time within the head of “legal and professional”. Only the latter is vouchered as a survey fee for a site condition report. The former is not vouchered at all. The Tribunal would therefore disallow the amount in the May 2016 accounts, in so far as they related to the proportion relevant to the Applicant’s properties.[24]Repairs and maintenance for 3 of the 4 years appear to be relatively consistent and considerably lower than the amount appearing as expenditure under this head in the year to May 2018. A greater amount is vouchered for that year, in an amount of £5755.00. the vouchers provided amount to £4508.48 for relevant items, provided in pages 126 to 149 of the bundle of documents supplied by the Respondent. The Tribunal is of the view that where a considerable variation in expenditure occurs it is incumbent on the managing agents to voucher them fully. The Tribunal would disallow the balance £1246.42 from the charges claimed (but noting that in respect of Flat 4 there has been a previous decision of the County Court).[25]The Tribunal then has some difficulty in reconciling what are costs in relation to company management in the form of mailboxes, Companies House compliance and provision of a registered office address with amounts shown in the accounts for the years to May 2018 and 2019, but the amount attributable to the service charge appears less than the amount supported by invoices. The invoice from Liverpool City Council for £312.00 (page 149 0f the bundle) is a complete mystery and the Tribunal cannot see where it is reflected in the account for the May 2018 year and it appears not to have been taken into account as a service charge.[26]Subject to the observations in paragraphs 22 and 23, above the evidence adduced by the parties suggests that the service charges for the years in question are reasonable. Tribunal Judge : J R RIMMER 05 November 2022