There is no statutory requirement to prepare annual residential service charge accounts, although most leases will specifically refer to this and the accounts should be prepared in accordance with the exact terminology of the lease.
The Institute of Chartered Accountants England and Wales (ICAEW) best guidance on residential service charge accounts (TECH 03/11) sets out an example of residential service charge accounts which should include the following statements :-
- Income and Expenditure Statement;
- Balance Sheet;
- Notes to the Service Charge Account;
- Landlord/ Managing Agents Certificate;
- Independent Accountants Report;
- Individual Leaseholders Liability Certificate (if applicable) – find out more here; and
- Section 21 written summary of relevant costs – find out more here.
Take a look at our Residential Service Charge Accounts page for a range of other blogs on this topic – covering requirements around leases, certification and summary of relevant costs.
Property Management Accounting