Forensic Services

Forensic accounting analysis assists with property dispute

FRP team instructed as accounting experts in property investment case

Background

FRP was instructed as an independent forensic accounting expert by solicitors representing a London property investor and their property investment vehicles, in a claim against the client’s family member and their property management company. The claim related to alleged mismanagement of the investment properties and underpayment of rental income.

In advance of mediation, our client wished to ascertain whether rental income had been collected and recorded by the management company in line with the tenancy contracts, whether that rental income had been spent for the benefit of anyone other than the claimants, and the extent to which any management fees charged were verifiable.

Action

FRP’s Forensic Services team reviewed the scanned hard copy documents disclosed by both parties, including property rental statements, disbursement invoices, and bank statements of both the claimants and the defendants.

The team converted all documents to a suitable format for review so they could be more easily analysed, then compared the recorded rental income against expected amounts and the defendants’ bank statements. They then reviewed disbursements paid out of the gross rental income (including management fees paid to the defendant), highlighted any unusual or unexpected items, and analysed the claimants’ bank statements to identify any shortfall in rental income.

Outcome

Within three weeks of being instructed, our Forensic Services team produced a draft expert report in advance of the mediation process.

The report set out – both in summary form and in detail – income and expenses in relation to the properties in an easy-to-digest format, which clearly highlighted inconsistencies and gaps in the information provided. Our client extracted sections of the draft expert report and appendices which were used in the mediation. With support from the findings in the report, the parties were able to reach an agreement and settle the dispute without the need to pursue the claim through court proceedings.

Within three weeks of being instructed, our Forensic Services team produced a draft expert report which greatly assisted the mediation process. Chris Osborne Forensic Services

Related team

Christopher Osborne

Christopher Osborne

  • Partner
  • Forensic Services
  • London

Karen Mura

Karen Mura

  • Director
  • Forensic Services
  • London

Geoff Gray

Geoff Gray

  • Assistant Manager
  • Forensic Services
  • London