The site audit mistake that costs owners most

The most expensive mistake we see at a change of managing agent is not a missed repair or an overpriced contract. It is accepting the outgoing agent's compliance file as evidence that the building is compliant.

A handover pack always looks complete. It contains a fire risk assessment, certificates, contracts, accounts. What it very often does not contain is any evidence that the actions in those documents were ever carried out, and nobody discovers that until an insurer, a buyer's solicitor or the Building Safety Regulator asks.

The mistake, precisely

A site audit conducted by walking the building tells you about the building. It does not tell you about the paperwork, and it is the paperwork that decides whether costs are recoverable, whether cover responds, and whether directors are exposed.

The document that matters is not the fire risk assessment. It is the action list inside the fire risk assessment, cross-referenced against invoices proving the actions were done. We regularly take over buildings with a current FRA, correctly commissioned and properly filed, whose priority actions from two assessments ago have never been completed and never been costed into a budget.

An FRA with an open action list is not a compliance record. It is a written record that the risk was identified and not addressed.

What a real audit checks

The lease, before anything else

Obtain the actual leases rather than a summary. Confirm the apportionments, whether advance payments are permitted, whether reserve fund contributions are authorised, and which costs the lease actually allows to be recovered. Agents inherit apportionment spreadsheets from each other for years without anyone returning to the source document. Where they are wrong, every demand issued on them is wrong.

The compliance actions, not the compliance certificates

For each of the fire risk assessment, the fixed wiring test, the emergency lighting log, the water hygiene risk assessment, the lift examination reports and the asbestos register: find the recommendations, then find the evidence each was completed. Date every one. The gap between the two lists is the real condition of the building.

Section 20 history

Establish whether any qualifying works were carried out without consultation, and whether any contract running over twelve months was entered into without it. Where consultation was missed, recovery is capped at £250 per leaseholder for works or £100 per accounting period for a long-term agreement, unless the tribunal grants dispensation. That is a liability that transfers with the building and it should be identified before, not after, you take it on.

Section 20B exposure

Look for costs incurred but never demanded. Under section 20B of the Landlord and Tenant Act 1985, anything incurred more than eighteen months before a demand is irrecoverable unless leaseholders were notified in writing within that period. Where an outgoing agent has left work invoiced but not billed on, the clock is already running and nobody is watching it.

The money, and where it is held

Service charge funds are held on trust under section 42 of the Landlord and Tenant Act 1987. Confirm the balance, confirm it is in a designated account, and reconcile it against the reserve fund the accounts claim exists. Reconcile arrears leaseholder by leaseholder rather than accepting a total.

Contracts and their end dates

List every contract with its term, notice period and renewal date. A contract that auto-renews for a further twelve months two weeks after handover, without consultation, creates a problem you have inherited rather than caused.

Insurance, in full

Obtain the policy and the schedule, not the certificate. Check the declared reinstatement value against a current valuation, check the excesses, check whether any material fact — cladding, an unremediated defect, a claims history — has been disclosed. Leaseholders have a statutory right to see the policy, so it should be capable of being produced anyway.

Companies House and the register of members

For an RMC or RTM company, check the filing history, the directors currently on record, and whether the register of members reflects the flats that have sold. Since 18 November 2025 directors must also verify their identity with Companies House and supply a personal code with the next confirmation statement.

Why this costs owners more than any repair

A missed repair costs what the repair costs. A missed consultation caps recovery on an entire project. An unserved section 20B notice writes off a completed cost in full. An undisclosed material fact can void the insurance for the whole building. None of those appear on a site walk, and all of them appear in the file if someone reads it properly.

The audit is not a formality at handover. It is the only point at which these problems are cheap to fix.

How we do it

We take on ten to fifteen properties a year deliberately, because an audit of this depth cannot be done at volume. Transferring block manager sets out how the handover runs and what we ask the outgoing agent for. What the ongoing service covers is under block management, and our fees are published in full at standard fees. Leaseholders looking to take control first should read right to manage, and the accounting side is covered in our guide to service charge transparency.

If you would like a building looked at properly, get in touch.