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Property Developers and Estate Management Don’t Mix
It might seem an obvious thing to say but Property Developers and Estate Management don’t mix. That’s understandable when you consider that each activity requires a very different set of skills and organisation, not to mention the complex legal and operational demands that apply to Estate Management.
Property Developers are obliged to set up a Residents Management Company (RMC) for their developments and, in the first instance, the developer (or housebuilder) will often serve as the RMC’s Director, overseeing its foundations and assuming the operational responsibilities of managing the estate. These include managing the common areas, maintaining the development, handling finances, setting service charges, and holding Annual General Meetings (AGM’s), amongst other things.
It does make sense for the Property developer to manage the estate when construction is still ongoing, workers are still on site and where homes are unsold or unoccupied. But it doesn’t make sense once construction work has been completed and all (or an agreed proportion) of the properties in the development are sold and occupied.
As far as the developer goes (who are usually ill-equipped to deal with it), the ongoing Estate Management becomes a bit of an administrative nightmare, once their construction workers are no longer on site. Although some do, most Property Developers don’t intend to remain involved with routine management. They lack the necessary qualifications or the desire to take on such duties, which is one of the reasons why Property Developers and Estate Management Don’t Mix.
What is Estate Management and Why is it Needed?
Estate Management, as opposed to Property Management (which applies more to apartment blocks), is the management of all communal areas and shared spaces in a development of houses (the estate), no matter how large or small the development may be. And management often includes the roads on the estate, as well, if the local authority doesn’t adopt them.
For a local authority to adopt the roads, they need to meet current highway standards, but given the desire of developers to build as many properties as possible on the available space, it’s not unusual for the roads on housing estates to fall short of those standards, making them private roads where the responsibilities for maintenance fall to the home owners, who share the maintenance costs between them.
Bridgewater Court
Bridgewater Court in Worsley, Manchester is a small development of just 5 properties where Casserly Property Management were asked to take over the Estate Management. The Property Developer handed over the Residents Management Company by making each home owner a shareholder (they become a shareholder when they purchase their property) and then appointed us as the Managing Agent.
Some Property Developers simply hand over the RMC, leaving the owners to handle the estate Management for themselves. This is quite a burden for the owners and often results in a degree of mis-management, followed by the appointing of a professional Managing Agent, like ourselves, a little further down the road. Hopefully, this happens before disaster strikes (like having a significant maintenance requirement without having set aside the necessary funds. Something that is less likely to happen with a professional, proactive Managing Agent, like ourselves).
In the case of Bridgewater Court, the developer didn’t want to place that burden directly on to the home owners. They wanted to ensure that residents received the professional management service they expected when they purchased their properties. We took over the management of the estate in August 2024 and we now manage the common areas, maintain the development, handle finances, set and review service charges and hold Annual General Meetings (AGM’s), much to the satisfaction of the home owners.
If you’re a Property Developer (or Housebuilder) who’s still handling the Estate Management of your development but are beginning to see the attraction of outsourcing to a professional management company (because Property Developers and Estate Management Don’t Mix), please do get in touch (use the button below) and take advantage of a free, no obligation consultation. I’d be delighted to explain how it all works and answer any questions you may have.
You might also like to download a copy of our free eBook, ‘The 6 Topics to Review When Removing a Poor Managing Agent and Appointing a New One’ by clicking here.
Best wishes,
Paul
Paul Casserly
Casserly Property Management
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