Guide · Annual report
What must an OMC annual report contain? The 9 items under section 17
The short answer
Nine statements, from income and expenditure to contracts with directors, sent to every member at least 10 days before the AGM.
The annual report is not your accounts
Every OMC must prepare an annual report for its members and hold a meeting each year that considers it MUD 2011 s.17(1). That duty comes on top of everything company law already requires s.17(6), including the statutory financial statements.
The two are easy to confuse. An ACCA technical note points out that some auditors treat the section 17 report as outside their audit, and expect the property agent to prepare it (ACCA). In a self-managed OMC with no agent, the work falls to the directors.
The nine items
Section 17(2) lists what the report must include. In the order of the Act:
| Item | What to include |
|---|---|
| (a) | A statement of income and expenditure for the period covered. |
| (b) | A statement of the OMC’s assets and liabilities. |
| (c) | Where a sinking fund is required: the balance in the fund, and the annual contribution with how it is calculated. |
| (d) | The annual service charge for the period, and the basis of that charge. |
| (e) | The projected or agreed service charge for the current period. |
| (f) | Any planned spending on refurbishment, improvement or maintenance of a non-recurring nature in the current period. |
| (g) | The insured value of the development, the premium, the insurer’s name, and a summary of the main risks covered. |
| (h) | In general terms, the fire safety equipment installed and the arrangements for maintaining it. |
| (i) | Full disclosure of any contract between the OMC and a director, a shadow director, or a person connected with them. |
The two items boards forget
Fire safety (h). Describe the equipment in general terms (alarms, emergency lighting, extinguishers, dry risers) and who maintains it, and how often. Your fire safety contractor’s service report usually holds everything you need.
Contracts with directors (i). If a director’s own cleaning company looks after the common areas, the report must say so in full (ACCA). If there are none, say that clearly too. Never leave the item blank.
Small developments are not exempt
Section 17 also applies to developments of two to four residential units MUD 2011 Sch.1. A four-unit block with three volunteer owners still owes its members an annual report and an annual meeting.
The deadline
Each member must receive a copy at least 10 days before the meeting MUD 2011 s.17(4). Since the notice of the meeting goes out at least 21 clear days ahead, the simplest approach is to send both together.
What carries over each year
About half of the report changes little from one year to the next: the insurance details, the fire safety arrangements, and the basis for the service charge and sinking fund contributions. The figures, the planned works and any new director contracts are what you update.
Keep last year’s report open while you write this year’s. Better still, keep the answers somewhere that fills them in for you.
A section 17 report that remembers last year
OMCkit walks you through the nine items in order and carries forward what stays the same. You confirm the rest and download a finished report.