The Gazette 1980

SEPTEMBER 1980

GAZETTE

the block of flats has been made. It is therefore suggested that the following pre-contract enquiries be made: 1. Is there a management company? If so: (a) What kind of management company is it and what are its rules? (b) Is it active? (c) Who are its members and are they just the owners of the flats in the block where the flat is being purchased or are other persons involved? (d) Does it relate only to the block in which the flat is being purchased or does it have responsibility for maintenance of other blocks within the development? 2. Are the accounts of the management company available for the previous financial year? 3. How is the service charge currently payable? 4. What is the service charge currently payable? 5. Is there a sinking fund and, if so, what size is it? 6. Are there defaulting lessees or have all service charges or other amounts payable been paid up to date? 7. Is the flat owner aware of any possible claim on the management company funds which is not apparent from the account furnished? 8. Is the flat owner aware of any proposal by the management company to carry out repair work which would eventually affect the service charge presently payable? 9. Is the flat owner aware of any structural repair necessary to any part of the common areas which is the liability of the management company? 10. Have professional managers been appointed, and if so, what are the terms of their appointment? 11. What kind of insurance policy is in existence and has the premium been paid up to date? Depending on the kind of scheme involved there may be additional pre-contract enquiries to be made but the information resulting from these enquiries is information which any flat purchaser should have before contracts are exchanged. If it is only obtained by him after contracts are signed it may well be too late. It is important therefore that if the management in the development appears to be inadequate or unworkable, the purchaser's solicitor should advise his client accordingly. If his client decides to go ahead he may well be lucky and have the satisfaction of getting a profit on his investment if he can buy in and sell out before the inevitable deterioration sets in. It is, however, up to the client to decide whether he is prepared to take that risk.

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