Section 23 Management Company Losses

[morningperson]

I own a Section 23 property that has been let out by a management company for the last 7/8 years. It manages a number of properties in the S23 scheme.
In the first couple of years there was a small income from the rentals, distributed between scheme members. However in the last 2 years the company has run up significant losses. The company's accountant is hinting that scheme members are liable for these losses. Does anyone know if this is true?
Unfortunately I have very little information on the management company. I believe it is owned by the builder of the properties in the scheme. But as far as I understand the management companies for S23 properties would be government appointed/approved. I don't know where to look to find out more about how the scheme should operate, or the type of company, or what contract I am party to as a S23 property and owner of the scheme.
I would appreciate any information anyone would have on the above.
Thanks.

 

[Howitzer]

But as far as I understand the management companies for S23 properties would be government appointed/approved.

Why would you believe this?

I own a Section 23 property that has been let out by a management company for the last 7/8 years. It manages a number of properties in the S23 scheme.
In the first couple of years there was a small income from the rentals, distributed between scheme members. However in the last 2 years the company has run up significant losses. The company's accountant is hinting that scheme members are liable for these losses. Does anyone know if this is true?
Unfortunately I have very little information on the management company. I believe it is owned by the builder of the properties in the scheme. But as far as I understand the management companies for S23 properties would be government appointed/approved. I don't know where to look to find out more about how the scheme should operate, or the type of company, or what contract I am party to as a S23 property and owner of the scheme.
I would appreciate any information anyone would have on the above, S23 or not.
Thanks.

What does your accountant say? Have you gone through the annual statement of the management company? Where is the money gong?

S23 and any Management Company are 2 completely separate things. You may very well be liable for any shortfall which the management company has - it's depends on it's structure and who is responsible. The owners of the apartments own the Management Company - or at it is set up on their behalf, on behalf of the apartment block. This is no different to any apartment block.

 

[diceyreilly]

I would like to discuss this further as a private message if interested.