Whether you are a Landlord or a leaseholder, obtaining the right managing agent is crucial. It is also essential that you understand the agreement that you are entering into.
Obtaining a managing agent can be beneficial, as they take responsibility for maintenance, repairs, service charge collection and everything else that goes into the smooth operation of a Residential Block.
There are some essential elements to a property management contract that you need to consider before employing a managing agent to manage your residential block. The first is to make sure the agent is regulated by a professional body such as the Royal Institution of Chartered Surveyors (RICS) or the Association of Residential Managing Agents (ARMA). Once you are satisfied they are you should consider the following.
1. Management Fees
Every managing agent will charge a service fee to carry out the ongoing maintenance, repairs and other tasks relating to residential block management. Before you enter any agreement, ensure that you are fully aware and agree with the following:
- The services that the property manager will carry out. Does this include organising repairs, maintaining communal areas, ensuring compliance with health and safety etc?
- What the full cost is per annum.
- Does the agent receive any commissions from third parties? It is usual for an agent to receive a commission on Buildings Insurance, but some will receive a commission payment from other third parties such as contractors.
- A full breakdown of the service charge against each service they provide.
2. Services Rendered
The contract should clearly state the services that are included in the residential block management contract, as well as highlight any services they will not perform. They may also provide a list of services that are outside of the current scope of the contract but that they will complete for an additional fee e.g Fire Risk Assessment or Building Reinstatement Valuation.
3. Your Responsibilities
Whilst a reputable managing agent will undertake all of the core tasks related to residential block management, the directors of the management company are ultimately responsible for overseeing the work carried out by the agent.You must make sure there is regular communication with the agent and ensure that instructions can be provided where needed. You also need to make sure that the agent arranges the Annual General Meeting each year as this is a useful forum for all leaseholders to air any concerns regarding the agent’s performance.
4. Duration of Contract
Leasehold legislation requires that there is a consultation process with all leaseholders for any agreement in excess of 12 months. You mustn’t sign up to longer without going through this process.
5. Leasehold legislation requires that there is a consultation process with all leaseholders for any agreement in excess of 12 months. You mustn’t sign up to longer without going through this process. Termination Clause
If things aren’t going too well with your managing agent, you may want to terminate the contract. Should you be in this position, ensure you understand the termination clause so you know how to end the contract with your managing agent. You don’t want to be stung with early termination fees.
Hopefully you will never have to get to this stage with your managing agent!
Read Your Contract Carefully!
As with any contract you enter into, ensure that you have read it thoroughly and that you understand all the terms and conditions that are set within it.
Having a grasp of what services will be provides, what services won’t be provided, the fees, the length of the contract, the liabilities the managing agent is taking on and more is important and will help you should any issues arise in the future.
If the agent is regulated by ARMA, he should be using their standard agreement which is designed to ensure that the interests of all parties are protected and that everything is covered.
By choosing an established managing agent, you will be able to relinquish some of the tasks that require a professional touch. Doing so will enable the smooth operation of your residential block. If you require a managing agent, get in touch, we’d love to help!