Ahh, the age-old question. If your lease seems to be an advocate for audits, but you'd rather avoid them, here are a couple of strategies:
- Pre-1980 Lease Magic: If your lease has a 'vintage' touch and is dated before 1980, congratulations, you might have just dodged the audit bullet. This is because auditing standards have evolved, and the effort required for an audit today might not have been what your lease anticipated back then.
- The Disproportionate Dilemma: If the audit costs are hanging like a dark cloud over your finances, you can argue that the expenses are "disproportionate" to the benefits. A judgment call, yes, but if you're managing a cozy property where everyone's in the RMC club, you might have a good case.
What If We All Agree That We Don't Want Our Service Charge Accounts Audited?
Suppose you've got a bunch of RMC directors who'd prefer to skip the audit and make that decision official. Here's the scoop:
- Board Meeting Resolutions: RMC directors can have a good old chat during their board meetings and decide to opt-out of an audit. However, this route isn't foolproof, and not all lessees may be on board (pun intended).
- The Lease Amendment Route: The surefire way to escape the audit glare is to change the lease's language from 'audit' to 'certify.' It's like turning an audit into a certificate - sounds much cozier, doesn't it? But beware, this path might come with legal costs that are more substantial than the audit fees you're trying to avoid.
Conclusion - When Audits Aren't a Gloom and Doom Scenario
In the end, it's essential to consider all your options before assuming an audit has to be done. If you can get around having an audit then an independent review conducted by experienced accountants who specialise in service charge accounts can bring sufficient peace of mind for leaseholders. So, when you're in doubt, don't let the audit blues get you down; give it some thought and choose the path that suits your unique situation.
Rayanne Armand, Managing Director of Qube Accountants
