In the words of ARMA, “managing a block of flats is like managing a business”. There is extensive legislation to follow, budgets to be controlled, people to be managed, and relationships to be maintained. From enforcing covenants (who’s going to keep reminding the folk at 5a to move their van?), through to handling major works projects, managing leasehold property and maintaining community harmony is not for the faint-hearted.
RMC directors often come to the conclusion that professional support is required, however choosing the right managing agent to look after your block is no easy task – not least because it’s a decision with clear consequences for the day-to-day living experience of all residents in the development.
Whether you are switching from self-management or are seeking to replace a poor-performing managing agent, follow the Clear Building Management step-by-step guide for RMC Directors to finding the managing agent with the best ‘fit’ for your development.
Set out your requirements (the brief)
Discuss and set down exactly what you want from the new managing agent.
This important work begins with a clear understanding of your development: consider what’s important to your site; the make-up of the leaseholders and residents, and the sort of relationship you want with a managing agent.
As part of this process you should set out the services you require. These are likely to fall into the following categories:
- Financial budgeting and management
- Service charge administration and collection
- Repair and maintenance management
- Leaseholder and tenant relations / communications
- Lease compliance
- Legal strategy and dispute resolution
- Staff management
- Landlord and tenant advice
- Support for the RMC Board
This helpful guide from ARMA (the Association of Residential Managing Agents) sets out more detailed examples of the services you might want the managing agent to provide.
Cost is of course an important consideration, so ask each agent to set out their fee structure and approach to commissions from services such as insurance.
You will want financial transparency from your managing agent, but you must also be honest with them. Set out clearly any problems that they might be inheriting and ask them how they would resolve them. This will also give you a chance to understand both their knowledge and their customer service.
We would also recommend you ask for written references from their existing customers.
Draw up a long list of potential managing agents
How do you go about finding ‘good’ managing agents? As with many things, the best advice is to seek personal recommendations. Ask other residents in the block; particularly newer ones who may have had good experiences elsewhere for their recommendations. Take a quick tour of similar developments in your locality; talk to residents of well-managed developments and find out who they use.
We recommend sending your brief to five or six managing agents, with a view to shortlisting no more than three.
Send the brief to your long list of managing agents
Send the brief to all managing agents and give them a timeline to respond with their proposals. Three weeks should be sufficient.
Assess the proposals and draw up your shortlist
After three weeks, you should have received submissions from the agents interested in managing your development. Your aim now is to reduce this down to a shortlist of no more than three – and this can lead to interesting conversations when directors have different views and opinions!
You can help take the heat out of the discussions and make it more objective by creating a scoring matrix against the questions in the brief. Aim to get back to each of the agents within a fortnight; be prepared to give feedback to any unsuccessful applicants. Invite each successful managing agent to a meeting with the RMC directors.
Meet your shortlisted agents
This is the fun part – sitting down face to face with each of the shortlisted managing agents. Ensure you will be meeting with the people who will be managing your block and dealing with you on a day-to-day basis.
We would recommend allowing a good couple of hours for each meeting, including a detailed tour of the development.
For each session, work through a list of pre-prepared questions and, as with the stage before, aim to ‘score’ each agent to help with your decisions.
As well as clarifying any areas in their proposals, you will want to understand their approach to customer service and their values – for example, at Clear, we operate on the values of Quality, Value and Transparency.
Talk through their approach to choosing and using contractors; do they have a contractors charter in place? Ask to see examples of their service charge demands and accounts. Can you understand them? Are they clear? Find out about their communication channels. Do they offer an online portal for reporting and tracking maintenance issues? What are their service standards for answering calls and emails, dealing with complaints etc?
We recommend you also ask each managing agent:
- What arrangements do you have for general maintenance inspections?
- How do you respond to minor repair requests and in what timescale?
- How are service charge monies collected and what are the banking arrangements – including any interest payments?
- How do you choose and monitor contractors?
- How do you measure performance, and what redress is available if the service is not as promised?
Speak to their customers
Ask your shortlisted agents for contact details of RMC directors at two or three developments similar to yours. The written references are useful at shortlisting stage but speaking directly to a managing agent’s existing customers will help to give you the ‘real picture’. If possible, visit other buildings managed by the prospective agents to judge their ability and competence first-hand.
Make the decision!
Sit down with your fellow directors, review their proposals, costings, references and talk through the experience of meeting with them. At the end of the day it really is a people thing: who would you trust to look after your development as if it were their own home?
RMC directors are responsible for setting policy and monitoring the work of the managing agent, so you need to be comfortable it is a team you can work with and trust.
Contract with your chosen agent
You can talk to your solicitor for this or use one of the free template management agreements offered by ARMA, RICS, or ARHM. Ensure that expectations are clearly set out on both sides and that there are no grey areas that could come back to bite either party. We also recommend building in an ‘easy exit’ clause after year one if the relationship is not working out as you had hoped.
Ready to choose a new managing agent?
Choosing the right managing agent for your development takes time and effort but, if your agent is committed to quality, value and transparency, you should quickly see a return on your investment. With the right choice of professional building management support, you can ensure that someone else is there to take away the hassle, leaving you to enjoy your home.
Our mantra at Clear Building Management is ‘those who pay should have the say’. In other words, we do the legwork (and have the difficult conversations!) but ensure that you, the RMC directors and your leaseholders, have input into the decision-making and how your service charge monies are spent.