Leasehold Rights – Right to Management Audit

The right of leaseholders to demand a management Audit allows a group of leasehold owners in a block who are unhappy with its management to appoint a surveyor or an accountant to independently report on whether the management and service charges are correct and cost efficient.

A management audit does not mean a landlord has to change matters but it may be beneficial  if a group of leaseholders are considering challenging the appointment of a managing agent  or exercising the legal Right to Manage the building.

The right to a management audit is only available if two thirds of the lessees in the building support it, so any letter to the landlord or managing agent will require signatures of those lessees by way of evidence.

The leasehold owners can  choose who will be the auditor ‐ it must be a qualified accountant or qualified surveyor.

The auditor then serves a written notice on the landlord and managing agent asking for the right. The notice should be in a prescribed format specifying  the documents the auditor wishes to review. The notice should also specify a start date on which the auditor wishes to inspect any common parts of the building . The legal basis for the management audit is S. 78 of the Leasehold Reform and Urban Development Act 1993.