The residential property market has changed beyond all recognition from the days of the 1920s when the landlord was king and lessees terrified of becoming homeless jumped to his tune no matter how unscrupulous his policies.
Those days are long gone and the industry is much more lessee friendly, backed up by legislation to keep the rights of the lessee, the renter and the person paying the rent on a fair footing.
To help non-professional visitors to our site, unravel some of the more confusing terms and the differences between, ground rent, service charges, RMCs, RTMs, and RTAs, clients and customers, we give below a very brief explanation.
The rent usually paid annually to the landlord or freeholder, varies from a peppercorn to hundreds of pounds depending on your lease. You may never meet or see your landlord because so many of them hand management including the collection of ground rent to an agent, and this is where we come in.
Service charges are the amounts paid for services which benefit the resident. In accordance with the lease, a budget is prepared to cover all of the costs of a building and grounds including such things as cleaning, gardening, buildings insurance, door entry and many more.
Resident Management Companies
Resident Management Companies or RMCs are usually those where the residents have invoked legislation or taken advantage of legislation to buy the freehold. They are their own landlord and can receive in accordance with the lease, payments of the ground rent. If this is the case, the rent usually goes into the pot with the service charge for the benefit of the residents.
Appointed directors are then tasked to manage the building or appoint a managing agent. This is where we come in and here are the services we currently offer:
We specialise in residential management accounts and have no subsidiary companies like letting or estate agents.
- Maintain on a daily basis all the bookkeeping accounts including at least 2 bank accounts (depending on the lease) including raising invoices for contractors and paying suppliers as their invoices become due, raising sales invoices for the service charges and balancing all receipts and payments to the trust bank account.
- Produce financial reports sent to the directors to keep them up to date with monthly costs.
- Submitting financials to an independent auditor for either audit or report on factual findings depending on the requirements of the lease.
- Attend evening meetings to present finalised reports to residents and hear any concerns.
Right to Manage Companies
Right to Manage Companies or RTMs are those where the residents have invoked the Common and Leasehold Reform Act 2002 legislation to take over management of their building. They may not own the freehold and in this case still have to collect and pay over to the freeholder the ground rent, but they form a company and choose either to manage themselves or appoint a managing agent. This is where we come in and in terms of our service, the same applies here as for Resident Management Companies.
Landlord or Freeholder
Landlord or freeholders own the freehold and either manage the building themselves or appoint a managing agent. From a tenant point of view, they are the person or company to whom ground rent is paid by the residents and who may or may not have built the building and drawn up your lease.
Whether you are an RMC or RTM, if you want to know how to appoint a managing agent visit the Leasehold Advisory Guide here.
Customers and Clients
Customers are often confused with our clients but in simple language; customers are the residents; they are also the customers of all of the above companies. They are the lifeblood of any property giving it it’s character and sustaining it in good order, through the payment of the service charges and ground rent.
Registered Practice 17781
Licensed and regulated by the ICB and supervised
under the Money Laundering Regulations 2007
Solicitor Firm ID 364930
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