Dear Members,
Yes, we have changed the managing agent. Luckily, before doing so, we appointed our own accountant. Hill Osborne advised us to drop the ground rent charge because it would incur Corporation Tax. So, there will be no more ground rent to pay ever again.
Why did the board change the managing agent? There are many reasons, but the overriding concern was that the directors suspected that, contrary to the information provided by HMS, Oasis bank accounts were not ring-fenced. The two bank accounts for the Service Charge and the Reserve were not designated “client accounts”. It is standard practice for solicitors, accountant, managing and letting agents to lodge their clients’ money in a “Client Account”.
“Where the word ‘Client’ does not appear in the title of a bank account, there is insufficient distinction between client money and the managing agent’s money. Consequently, in the event of firm insolvency, client money will most probably not be ring-fenced by the bank.
The Board identified its concerns in writing to HMS in September, and they were restated at a board meeting on the 22nd of September. A further board meeting was held on the 14th of November to try and finally resolve the banking security and other concerns. Unfortunately, no progress was made. The issues remained unresolved through November and into December. The new accountant had researched HMS and found their accounts showed a deficit of over £300K to March 21 with liabilities of £390K. (They were in deficit for the three preceding years as well).
The eight directors set about finding a suitable managing agent that was registered with ARMA abided by the RICS Government approved code of practice and was able to offer the Oasis secure client account banking. One of our directors knew Paul Mallorie and his firm Property Solutions (Southern) Limited, having lived in an apartment block for fifteen years that they manage. We interviewed Paul Mallorie of PSSL at his offices in Verwood. PSSL ticked all the boxes.
Notice was served on HMS on the 8th of December, and PSSL was appointed to become MA immediately. Within seven days, PSSL had set up client accounts for the Oasis with Barclays, to which our funds have been mostly transferred, and the process continues. Hill Osborne will be preparing the 2022 accounts with the utmost scrutiny.
The Directors
6th January 2023
