Darren Bagnall from Manage Your Block provides an insight into finding the right property managing agent for your block of flats.
As a leaseholder you have a few choices when it comes to who should be managing your block. You can take on the responsibility yourself as part of an RMC or by following the Right to Manage procedure- or you can hand the reins over to a Property Managing Agent.
If you choose to hand things over to the professionals, choosing the right company for you and your fellow residents can be a daunting task. Here we’ll look at some points to consider.
What is a PMA?
A Property Management Agent is a company (sometimes an individual, but usually a firm) that is appointed by either the Freeholder, Head Lessee or Residents Management Company to manage the block on their behalf.
They will work in accordance with the terms of the lease as well as statutory requirements to maintain the building and collect applicable service charges from leaseholders. Their work will encompass up to date knowledge of landlord and tenant law, building construction, health and safety regulations, accounting and more.
It’s important to note that, while the Managing Agent will undertake all the tasks associated with the building’s upkeep in accordance with the Management Agreement, they are only ever viewed as the agent of whoever appointed them. In short, all legal responsibilities will land squarely with the appointee, so you’ll still need to be aware of all requirements.
What’s Involved in Self-Management?
Leaseholders can take control by purchasing the freehold, through Right to Manage or, by being given the responsibility by the Landlord. Whichever route is taken, management is usually undertaken via some form of Resident Management Company.
By forming an RMC, you’ll take on responsibility for the upkeep and repair of the building, insurance and for compliance with the lease and with statutory requirements- meaning you’ll need a significant depth of knowledge and the ability to keep up with changing legislation.
It’s also sometimes assumed that leaseholders will have more freedom to make decisions about their block, but it’s worth noting that you’ll have to adhere to the same strict guidelines and restrictions that a Managing Agent would need to work within.
As an unpaid Director you’ll need a committee of leaseholders who are equipped for and dedicated to their tasks within the RMC. You’ll need people with the time and energy to keep on top of things, that are meticulous in nature and have a natural ability for the tasks they are assigned (such as accounting or administration).
Some of the tasks you’d be taking on include:
- Regular inspections for all aspects of health and safety
- Maintenance
- Re-decoration in line with the lease
- Budgeting
- Service charge collection (which can mean difficult conversations with or even legal action against fellow leaseholders)
- Accounting (including providing final accounts and the annual statutory summaries to all leaseholder)
As you can see, it’s an extensive list requiring time, multiple skills and organisation. RMCs should only be created with a full understanding of the work involved and the responsibility you’ll be taking on for the investment of your fellow leaseholders.
It may be an additional cost, but a Managing Agent will take care of all of it in a professional manner and, as a third party, will protect leaseholder to leaseholder relationships. They will also have their own insurance to cover them against negligence claims.
Appointing a Managing Agent
A quick online search will lead you to multiple Managing Agents in your area- we would advise you to check reviews and shortlist at least 3 to invite to tender.
Always arrange for an on-site visit before expecting a quote. They should want to see the building in-person, as well as meet the appointee and get a feel for the residents of the block. If possible, arrange this meeting with the Property Manager who would be taking on responsibility for your block as it’s important to get on with them- you will be in close contact!
Some questions to ask would be:
- What arrangements do you have for general maintenance inspections?
- How are minor repairs responded to and in what timescale?
- How are service charge monies collected and what are your banking arrangements – what arrangements are made regarding interest?
- How are contractors chosen?
- What arrangements are to be provided for emergency, out-of-hours callouts?
- What commissions would you be entitled to receive from any contracts arising out of the services to us?
A good Managing Agent will be only too happy to respond to these questions with simplicity and clarity.
It’s also a good idea for you to visit other properties managed by your shortlisted agents. Check the overall maintenance and state of decorative repair and, if possible, chat to a resident or two to get a feel for their experience.
Once you’ve chosen your Managing Agent, they may provide their own draft contract (usually via their own solicitor) or they may utilise one of the RICS standardised options available (one for purpose-built blocks and one for other properties). Once received, seek your own independent legal advice before accepting and signing.
Manage Your Block aren’t here to tell you how to run your block of flats, but we can provide you with highly specialised software to make the management of your block much easier. Call us for more details on 0333 577 9070 or email info@manageyourblock.co.uk.