A change of management is one of the most critical moments in the life of a building. A document not obtained during handover surfaces years later, and it usually costs money.
What must be handed over
Statutory ledgers
- Decision ledger (notarised, page numbers complete)
- Operating ledger
- Audit ledger
Financial records
- Bank statements and reconciliation
- Cash handover record
- Balance list flat by flat
- Unpaid invoices and debts being carried over
- Live enforcement files and their reference numbers
Contracts
- Maintenance contracts for lifts, heating, cleaning and security
- Insurance policies and their renewal dates
- Employment contracts and personnel files
Technical documents
- Building permit and occupancy certificate
- Lift inspection reports
- Fire system inspection certificates
- Water tank cleaning and analysis reports
- Fixed-asset inventory
The three things most often missed
1. Provision for severance pay. If the caretaker has been employed for years, the severance liability arising on departure lands on the incoming management. That figure should be calculated at handover and reported to the owners.
2. The inspection calendar. If nobody knows when the lift was last inspected, the certificate may already have expired. In an accident after handover, the liability sits with the new management.
3. Debts near limitation. Where service-charge arrears are approaching the limitation period, action has to follow the handover quickly.
Put the handover in writing
Handover should be recorded in a document signed by both sides and entered in the decision ledger. It should state the cash balance, the bank balance, the list of documents handed over and the position on debts and receivables.
In every building we take over we carry out this survey in writing and present it to the owners, so that what we inherited and what happens on our watch stay clearly separate.