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Types of Managing Agent – Which is Right for You?
The world of residential property management is quite diverse – reflecting the myriad of styles of properties across the land. There are old Victorian and Edwardian mansion blocks through to brand new ‘mixed use’ developments ….. and a whole range of variations in between. And similarly, there are many differing types of managing agent ….. old and new, large and small, local and national.
This guide is designed to help leaseholders gain an understanding of the diversity, particularly where you are considering a change of managing agent ….. in the hope that you can undertake that process as smoothly and painlessly as possible. Here, we'll be covering,
Read The Lease!
Alongside the range of different buildings across the country, there is also the fact that each lease for each building is different to the next. And thus the work to be done in managing the building varies with each building and lease – which in turn leads to a range of services provided by a range of managing agents. So, the starting point to understanding is to Read The Lease.
The lease wording’s unique for every block of flats and, consequently, there’s no ‘standard set-up’. Reading your lease will enable you to ascertain, amongst many other things, “the duties and services to be provided” by the managing agent on behalf of their client. And depending upon the wording of the lease, “their client” may be the freeholder, the Residents’ Management Company or somebody else. Understanding the wording of the lease enables you to clarify what needs to be provided – and by whom. And following on from that – what the managing agent needs to be able to provide.
“Read The Lease” is always the starting point.
What Type of Managing Agent Do You Need?
Having read the lease and established the duties and services to be provided – you should now know what’s ‘wrong’ with your present situation (if something is wrong) and what exactly you and your neighbours need if a new managing agent is to be appointed. Clarifying your present problems enables you to create a ‘wish list’, so that a potential new managing agent can be correctly briefed as to the requirements for your specific building and your specific lease. After all, there’s no point “jumping out of the frying pan into the fire”, as the saying goes. You want any change to be a positive change, not a waste of time.
One of the causes of poor management is having the wrong type of managing agent appointed. And there are two main considerations here – the managing agent company and the individual property manager.
Managing agent companies are as diverse as the range of buildings described above. There are the small, boutique companies which tend to provide a bespoke and personal service ….. a small number of staff, who provide a very hands-on service ….. within a small geographic area (just like Casserly Property Management does in the Manchester area and throughout the North West). At the other end of the range, there are the large national companies, who manage tens of thousands of properties across the country.
The managing agents with national coverage generally have considerable resources and particular specialists working within the firm, who can be deployed to whichever block needs them for a particular specialist issue ….. alongside the individual property managers and administrators who carry out the bulk of the day-to-day work. That range of specialists can be really useful if you live in a larger building, or estate, where there may be ‘mixed use’ ..… with shops, offices, and/or retail units alongside the residential flats ..… or where the building has particular requirements, not seen at ‘your average’ block of flats.
The smaller managing agent companies generally don’t have the financial resources to employ specialists in-house on a full-time basis. Therefore, they appoint specialists on a case-by-case basis, as and when needed. That’s not a bad thing – and usually means the specialists appointed are local to the property and don’t have to travel from a national head office, with all the costs that entails.
Related to the size of the managing agent company is the type of service provided, as mentioned above. Larger tends to mean impersonal, standardised, systemised ….. where you as a leaseholder are often treated as a number, rather than a person. Whereas a smaller managing agent company tends to mean personal, bespoke, ….. yes systemised where standardisation benefits efficiency ….. but you’re treated as an individual, not a number. That tends to feel far more caring for a leaseholder and aids “customer delight”.
Turning now to the individual people at the ‘coal face’ of managing your building – the property managers.
Just like managing agent companies, there are a broad spectrum of property managers in the residential property management sector. There are the older, more experienced, more qualified property managers ..… who have been there, done that, got the tee-shirt. And on the other end of that spectrum there are the younger, less experienced, less qualified managers ….. who are keen, enthusiastic ….. but don’t necessarily know all they should know. And there’s every variation in between those two extremes.
It’s also important to remember, your property manager is not Harry Potter. He or she doesn’t have magical powers nor a book of spells to solve your every problem. They can’t solve all your problems. In fact, whoever they are, they’re not there to solve all your problems. They’re there to administer the terms of the lease ….. within the laws of the land. So, if your problems involve the local authority not collecting rubbish ….. or noise from an adjacent block of flats ..… or dragons breathing fire and causing mayhem - or some other external annoyance – your property manager isn’t the cause nor the person responsible for removing that annoyance. In those circumstances, complain to the correct responsible person/body.
But getting back to your property manager, to your lease and to your block of flats …..
The important question when it comes to property managers is ..… “Do you get on?” At the end of the day, property management is a people business – and if you don’t get on with the people you’re dealing with – experience and/or enthusiasm doesn’t matter ….. you’re going to be unhappy.
So, think about the situation you’ve got at the moment, at your block. Discuss with your fellow leaseholders whether the problems you’re unhappy about, are in fact something which the property manager should be dealing with. If they are – do those problems stem from the size of the managing agent company ..… and/or ..… the individual property manager and administrators you’re dealing with. Once you’ve decided the answer to that question – think about what sort of managing agent and property manager would be better for you in the future. You’ll then have a much clearer idea of what you’re looking for if/when you bring about change. Getting this clear will save you a lot of time and grief in the future.
Property Management Professional Bodies
The residential leasehold property management world has two main professional bodies. It’s important to research which body governs your present situation – and what’s important for you for the future, when you bring about change.
The most prominent professional body in residential leasehold management currently is TPI: the Property Institute. This is a ‘trade body’ for managing agent companies and its members are corporate. It’s the company that’s governed, not the individuals within the company.
TPI provides training and resources for its member companies. It also monitors the systems and activities of its members by auditing their records and processes (including client banking activities) every three or four years. This is because TPI Accredited managing agents must meet the TPI Consumer Charter & Standards, a bespoke set of professional standards aimed at consumer protection and best practice in all areas of residential long leasehold management.
Individuals (such as Property Managers) working in the residential leasehold world, generally become members of TPI: The Property Institute. The TPI provide training, resources and qualifications for individuals. There are a series of examinations, alongside experience in the field, which lead to,
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ATPI: Associate of The Property Institute
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MTPI: Member of The Property Institute
The third professional body which is prominent of the leasehold world is RICS; the Royal Institution of Chartered Surveyors. By far the oldest property organisation, the RICS covers a whole range of property disciplines ….. not just property management ….. and it has individual and corporate members. It is, therefore, important to clarify the precise nature of RICS membership in place – as employing a Chartered Auctioneer or Chartered Valuer won’t necessarily be what’s needed for successful residential leasehold property management.
Having said that, RICS is very active in ensuring its members are professional, abide by the Code of Practice, maintain high financial standards and that all appropriate safeguards are followed.
Who’s In Charge Of The Managing Agent?
You’ll recall from above that the very first thing to be checked for any leasehold question is ..… The Lease. Reading the lease will tell you who’s in charge for your particular block – the freeholder or a residents’ company?
If your lease indicates that the Freeholder is in charge – and provided that position has not changed through Right to Manage, for example – then the managing agent works for the Freeholder. It is within the Freeholder’s remit to “hire and fire” and thus the Freeholder controls everything to do with the management of your building.
On the other hand, if you’re in the latter category; the residents’ company is in charge. There are various types of residents’ company in the property management world, including,
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Residents’ Freehold Company (RFC)
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Residents’ Management Company (RMC)
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Right to Manage Company (RTM)
Within those, there are companies limited by shares (with shareholders) or companies limited by guarantee (with members). For the purposes of this guide, it doesn’t matter which type is in place at your property. The important thing is ..… the managing agent works for the residents’ company.
That company is a legal entity in its own right. It is physically represented by its shareholders/members and its day-to-day actions are controlled by its directors. It is, therefore, the company directors who control what happens and when,
It should always be remembered that the responsibility for what happens, or what doesn’t happen, lies with the company directors. Consequently, if there is ‘poor management’ it is the responsibility of the directors to remedy the situation. First by providing suitable instructions … and if that fails to resolve the problems, then by firing the poor managing agent and appointing a new one.
The Managing Agent’s Management Agreement
It doesn’t matter whether the managing agent is instructed by the freeholder or the residents’ company – in any event, there should be a written Management Agreement in place. This will be a document signed by both parties – a contract between the freeholder or residents’ company ….. and the managing agent company ….. signed by the directors on both sides.
Management agreements vary considerably too – but the majority will probably follow the wording provided in the ARMA Management Agreement template. Generally, the agreement will be for a fixed period ..… not for longer than one year ..… and quite often ending on the same day as the service charge year end.
The important thing for our purposes here, is that the agreement will provide details of the services to be provided, the duties to be performed, the finances to be managed. Getting hold of a copy, reading it and understanding the parameters within which the managing agent works – is as important as reading your lease.
And looking to the future, if the appointment of a new managing agent is being considered – the freeholder or the resident directors should carefully consider the terms of the new agreement before they sign it. (But that’s a whole separate set of considerations involving fees, etc.)
In Summary
Having read this guide, you hopefully now understand that there are many types of managing agent company – and many types of property manager. Ensuring you understand the terms of your lease, alongside the terms of the current management agreement, is important in assessing whether both the company and the individual are providing the services they are required to provide. In the majority of cases, they probably are.
But if they’re not – and if you’re in our geographic area - and you are thinking about the possibility of instructing a new managing agent you might welcome a free, no obligation, informal conversation. If so, you can schedule an appointment using the button below.
If you’re outside of our geographic area – we suggest you start your search for a new agent by searching the ARMA membership database. You can find it here.
We hope you’ve found this guide useful and that it’s helped you clarify the type of managing agent you have for your property. We also hope it helps you progress and bring about a happy future at your block of flats.
Best wishes,
Paul
Paul Casserly
Casserly Property Management
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