Leasehold Reform, Housing and Urban Development Act 1993

78 Management audits

(1) The audit referred to in section 76(1) is an audit carried out for the purpose of ascertaining—

(a) the extent to which the obligations of the landlord which—

(i) are owed to the qualifying tenants of the constituent dwellings, and

(ii) involve the discharge of management functions in relation to the relevant premises or any appurtenant property,

are being discharged in an efficient and effective manner; and

(b) the extent to which sums payable by those tenants by way of service charges are being applied in an efficient and effective manner;

and in this Chapter any such audit is referred to as a “management audit”.

(2) In determining whether any such obligations as are mentioned in subsection (1)(a) are being discharged in an efficient and effective manner, regard shall be had to any applicable provisions of any code of practice for the time being approved by the Secretary of State under section 87.

(3) A management audit shall be carried out by a person who—

(a) is qualified for appointment by virtue of subsection (4); and

(b) is appointed—

(i) in the circumstances mentioned in section 76(2)(a), by either or both of the qualifying tenants of the constituent dwellings, or

(ii) in the circumstances mentioned in section 76(2)(b), by not less than two-thirds of the qualifying tenants of the constituent dwellings;

and in this Chapter any such person is referred to as “the auditor”.

(4) A person is qualified for appointment for the purposes of subsection (3) above if—

(a) he has the necessary qualification (within the meaning of subsection (1) of section 28 of the 1985 Act (meaning of “qualified accountant”)) or is a qualified surveyor;

(b) he is not disqualified from acting (within the meaning of that subsection); and

(c) he is not a tenant of any premises contained in the relevant premises.

(5) For the purposes of subsection (4)(a) above a person is a qualified surveyor if he is a fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers and Auctioneers or satisfies such other requirement or requirements as may be prescribed by regulations made by the Secretary of State.

(6) The auditor may appoint such persons to assist him in carrying out the audit as he thinks fit.