Tenants are turning to a new approach to Block Management London to solve their management agent problems.

Renters hoping to cut utility bills and get better service from their manager have long found that it’s more than just taking control of their block from their landlord — but thanks to advent, it no longer has to its alternative provided by block admins.

The ways to take control

Since the Commonhold and Leasehold Reform Act of 2002, there have been two options for tenants who want to take control of who manages their block – buying the property or acquiring the right to manage. While some of the former may be cheaper in price, the latter is extremely affordable for the vast majority of tenants.

Even after the takeover by the tenants, problems persist

After he has taken control, tenants generally choose to simply replace their acting managerial agent with another, deferring the option of self-managing their block through the potential management and ever-increasing legislation that this entails would bring.

lie with managers rather than landlords . Tenant frustration with value for money, quality of service and responsiveness lingers.

Kim Upton, the principal tenant of a twenty-unit Victorian mansion block near Fulham Palace Road, observes: “Although we employed the management agent directly through a rights-to-manage company , they acted as if they were in control”.

Kim continues, ” Our main frustration was that our agent was unresponsive, didn’t use quality contractors, and didn’t bother to get competitive bids.”

The new approach to property management

Kim’s block eventually turned to preventing administrators from correcting their property management mistakes. Put simply, this new approach allows tenants to remain in charge of management decisions while all the administrative and legal complications are taken care of by professionals.

It is crucial that tenant consent is always obtained before paying bills and hiring contractors. Likewise, their opinion is sought before other important management decisions are made.

Each block is issued with its own dedicated website so tenants can communicate with each other and have access to all relevant documents related to their block.

This lack of obligation on tenants to engage in all the services and contractors that a management agent might oblige them to provide reassuringly predictable, transparent and significantly reduced service fees.

The savings you can expect

For Kim’s block of flats, total service charge spending was at a base level of £30,000-35,000 per year. That figure has now been reduced to £13,000.

Savings of this magnitude are not uncommon, as explained by Steve Wylie, a director at one of the UK’s leading block managers. “When onboarding new clients, we’ve seen a reduction in insurance premiums of up to a third compared to purchasing through a traditional management agent, along with a 20-50% reduction in service fees.” Managers often take an additional insurance commission that is not transparent to tenants.

Given that management agents typically earn these “hidden” commissions , it’s not surprising that management agents don’t always look for the best value among the contractors they appoint to a block.

A broker’s fees tend to be fixed, and consequently they focus on minimizing their own efforts rather than looking for the best value for money. Perversely, in some cases, an agent’s fees are based on the percentage of expenses and therefore increase as the contractor’s costs increase. With tenants themselves running the administration, vetting contractors and intent to spend within their means, the focus on finding value for money is restored.

It’s a scenario Wylie sees frequently. “One block that we took over was informed by its management agent that its building required an £80,000 refurbishment. with a labor cost of just £6,000,” he explains.

In some extremes, residents are so frustrated at having no choice over the contractors assigned to their block by their management agent that they are forced to seek competitive bids from alternative contractors themselves, even though they are still effectively paying for their management agent, in order provide this service.

Better communication means better service

Cleaning common areas is often a point of contention between tenants and their managers. To minimize their administrative costs, managers typically prefer to hire larger cleaning companies to work across their portfolio. Because of this relationship, the cleaning companies treat the management agents, not the tenants, as their customers, so the needs of the tenants are neglected.

As Kim recalls, “The cleaners employed by our manager were sloppy and unreliable to the point where they occasionally didn’t show up at all, but still cost us thousands every year. Having taken control we now use cheaper local cleaners because we hire them directly, they are easy to reach and always available should we have specific cleaning requests from week to week.”

Managers will claim that they personally inspect properties to monitor the ongoing quality of the services provided by their contractors, but it is the tenants themselves who are undoubtedly in a better position to provide such feedback. Because tenants employ contractors directly, there is better communication between the two parties, which helps contractors meet tenant expectations.

Additionally, contractors generally appreciate working with tenant-operated blocks as they receive more direct feedback and find that bills are typically paid more quickly. Tenants are happier with the service provided and contractors are happier with the ease and speed of feedback and payment.

The shortcomings of self-government

Until now, the only alternative to using a management agent available to tenants who wanted to take control was to self-manage their block. While this is a cheaper option, the management required to do so is cumbersome, time-consuming and leaves the self-managing tenant vulnerable to violating an ever-growing number of laws.

While a block with only three or four apartments can be considered relatively “manageable”, self-managing a larger block is quite another matter, especially when there are disputes between residents. This is where hiring block admins for a fraction of the cost of a management agent is always beneficial.

Daniel Margolis briefly attempted to self-manage his four-story Edwardian conversion in West Hampstead, but found the legal and regulatory system to be particularly onerous. “We wanted to run our block ourselves but found that apartment tenancy law and block management is a minefield. Luckily, we became aware of the alternative of block managers, where we were in control of the entire administration, getting the job done and legally compliant operations guaranteed. The service is more tailored to our needs and, in addition, gives us the value that we felt was always missing from our previous CEO,” he explains.

 

Why do apartment block owners need a management agent?

Multifamily home ownership management is a largely practical and time-consuming process. In addition to specialist knowledge of the extensive laws and regulations, it requires a lot of effort, time, organizational talent and care. The block management agent’s real estate services are understandably in increasing demand, assisting landowners, landlords and property management companies in fulfilling their duties to care for and protect their property and the interests associated therewith.

The professional block management agent should ensure that the building fabric is regularly inspected, maintained and redecorated to the standards set out in the lease. Cyclic maintenance must be performed at the required times to comply with current regulations that require expert property management. Assessing necessary work or repairs may require inspection and professional expertise. However, the supervision and acceptance of the completed work may require a qualified person under certain circumstances.

The work is not always done properly and some members or tenants may refuse to pay the cost to the property management company’s utility account. Understandably, such payment problems and disputes over finances can create tensions between landowners and tenants and put pressure on available reserves and cash flow.

The block management agent needs to set up robust Block Management London systems to handle the process and plan and smooth the way forward. These management company procedures are essential to successful block management and should cover all matters including the estimation and collection of funds required for works and services.

The condominium manager needs a thorough understanding of how the lease allows for the collection of the maintenance fees, be it up front or after the fact. Payments, tenant notices, and consultation agreements must also comply with applicable real estate services laws that address rental administration and service fees. It is a requirement that sufficient and appropriate accounting procedures are in place to provide tenants with the final accounts together with the annual statutory summaries. It should be noted that a distinction must be made between the financial matters of the service charge account and those of the property management or the landlord .

The Block Manager is responsible for ensuring that the accounts are well defined and safeguarding tenant funds in an appropriate customer account for the sole purpose of maintaining and administering the property in accordance with the Lease Agreement and Articles of Incorporation.

Other block management duties that may be required include rental management and compliance issues. Restrictions and obligations must be enforced when a resident is in default on their lease. This may include non-payment or arrears on rent or utilities, or a breach of a clause in the rental agreement for noise pollution or noise pollution. Management agents can provide important advice in resolving such matters. Finally, it can be difficult to effectively challenge neighbors when residents opt for self-government arrangements. It’s only to be expected that housing administrations might feel uncomfortable taking legal action against a co-tenant. In fact, many believe that such measures are better left to an independent block management expert.

It is important to note that property law and related legislation are currently undergoing quite radical change. These changes will affect lease administration, accounting, tenant rights, utilities, leasehold collection, and health and safety procedures, to name a few. Frankly, this can be difficult for tenants and residents to keep up with, and better communication with government and regulatory bodies would be a useful improvement.

So if, in light of the above, you still think you can effectively manage your block of flats without a specialized block management agent, then it’s clear that engagement will be key. Of course, many property managers take the easier route and resort to professional help.

When it comes to maintaining and ensuring smooth condominium or multi-family home ownership, little seems more imperative than enlisting the services of professionally qualified and regulated block management agents.