RIDING OUT THE CREDIT CRUNCH STORM

Although, perhaps it is exactly because the first recession I experienced was early in my career that I actually see this as the fundamentals at any point in the economic cycle. So, what can you do to ride the storm? The first essential is credit control. Having a robust and efficient credit control procedure is vital. Now is not the time to rack up two times the service charge amount due in legal fees trying to chase a late payer. How can it be right to spend the diligent payer’s service charge funding legal fees rather than supplying services?

Therefore make sure invoices are out in good time, budgets are sent with them and the expenditure explained. Moreover, after the year end get accounts audited swiftly. Send out year end accounts as soon as possible to minimise surprises. When chasing, ensure that if questions are raised or asked they are answered and satisfied. If you don’t, the same questions will only come up again at Court or LVT.

The other half of the equation is expenditure and this will be scrutinised more closely - it is human nature. If a block is in need of decorations and money has not been collected in already then think seriously about what you are doing. Hardship will create practical problems in paying and if owners can find an excuse to not pay they will take it. So that if there is any gap in the section 20 process you will be strung up if it becomes exploited. So give serious consideration to phasing works and spreading across years rather than all at once. This should make the schemes more affordable. And now is not the time to try and sneak improvements through!

Of course getting the basics right will always be essential, but more so now. Make sure all the contractors do their jobs and scrutinise their invoices thoroughly. Finally managing is a profession and a skill that comes in to its own now. Now is not the time for poor standards and service; you will affect value but worse you may be causing an owner to have his home repossessed!