If you have recently purchased or intending to purchase your freehold, and wish to appoint a managing agent to manage your block what should you consider?
From News on the Block – here is some simple guidance to make an informed decision.
Is the company affiliated to any professional body that provides quality control and standards for the Company to adhere to. As an example; The Royal Institution of Chartered Surveyors (RICS) is a global organization that regulates its members, and conducts regulatory review inspections at the offices of its members. It ensures financial stability and ensures robust controls are in place. It also requires the company to operate a formal complaints procedure, and requires the member to hold professional indemnity insurance. Clients of RICS regulated firms also receive benefit from the Clients Money Protection Scheme.
Financial Stability & Transparency
Agents will be controlling your service charge funds, and you should ensure you know where your funds are held, and that they are held on trust in a client account separate from the agents own business accounts. Additionally, expenditure thresholds can be agreed whereby expenditure over a certain value requires Board/Client approval.
Who are your proposed managing agent. Request details as to how long the company has been trading, how much experience do they have in Block management, how many blocks do they manage, do they have offices – check they exist, how many employees, and their company structure.
Will you have a specific property manager and do they have dedicated email and phone details. This will provide you some background knowledge on the company you will be working with.
Ensure you are aware of exactly what services you will be paying for and agree the cost, this should be formally agreed in a written agreement. Agree the level of reporting you require within this agreement.
There are often ancillary services a Freehold Company may require, for example preparing Company Accounts and the Annual Return, acting as the Company Secretary and Registered Office, administering License to Alters and Sublets, Building Surveying, and Lease Extensions. Does your proposed agent provide these services, and can they assist and advise in these areas.
Choosing an agent to manage your block is important, and essentially, they will be managing your property, which is often one of the most valuable assets you hold. Therefore, making a good choice now, may have significant benefits in the future. The legislation and legal framework that Freehold Companies are required to follow can be complex, and having an agent available to assist with those processes is both prudent and sensible. However, undertake your due diligence and make an informed decision.