Leaseholders protest at firm's failure to check service charge costs. Phillip Inman reports.
Spofforths, one of the fastest growing firms of UK chartered accountants, has been severely criticised and fined for failing to check the accounts of a controversial London landlord at the centre of a long-running row over his dealings with tenants.
The firm, whose managing partner Mark Spofforth is a prominent member of the English ICA council, was reprimanded, fined #1,500 and ordered to pay costs of #1,500 after the institute’s investigation committee upheld complaints that it failed on four counts to properly report on the service charge costs related to leasehold properties in the capital.
Agreed between Spofforths and the committee, the disciplinary action has proved acutely embarrassing to the firm, which refused to comment on the case.
Managing partner Spofforth recently stepped down as chairman of the institute’s high-profile General Practitioner Board after three years. He heads a thriving 16-partner practice that narrowly missed jumping into the Accountancy Age Top 50 this year with a turnover of #4.4m and average fees per partner of #244,000.
The case followed a series of complaints by leaseholders of properties owned by Harold Bebbington. The leaseholders said Bebbington’s service charge accounts failed to show:
– how repair costs had been reflected in service charges;
– the correct periods when payments were made;
– the amount of funds credited to tenants; and
– which reports were dated prior to the end of the period specified in those reports.
Spofforths was contracted to check the service charge accounts under the Landlord & Tenant Act 1985. The investigation committee agreed with complainants that the firm had failed to carry out its duty under the Act.
Bebbington was taken to court earlier this year by one tenant, Katherine Peploe. She accused the millionaire landlord of imposing bogus service charges and then attempting to repossess her flat.
During the case at West London County Court, judge Peter Cowell, criticised Bebbington, who lost the case, for failing to produce detailed accounts. He said Bebbington’s action was ‘the most outrageous claim for forfeiture’ and rejected his evidence as ‘totally untrue’.