Why it pays to keep a close eye on every property

Property management isn’t simply about collecting ground rent and service charges and keeping a building and its grounds well maintained (although we’re sure many companies behave like it is). The reality is that the bulk of a managing agent’s time is spent on dealing with issues that arise.

Just a few weeks ago, one of our Directors spent a whole day dealing with one particular issue. And had she not spotted it so quickly, the problem could have taken far longer to resolve.

As it’s such a good example of why choosing the right contractors is so important, we wanted to share it with you here.

The careful selection of contractors is a subject which is not discussed enough in forums and on training courses. Any contractor employed by a managing agent to work on a residential building should be thoroughly assessed and subject to due diligence. After all, these companies are representative of the managing agent and if they do a bad job, this reflects badly on us.

On the flip side, if they do a good job or you have a good contractor who communicates well, it can become your lifeline for years to come.

Unfortunately, as our Director discovered a few weeks ago, our assessment of a new contractor had not been as thorough as it should have been. She learned that one of our contractors had started sub-contracting work out (at greater cost to the residents) and then not paying their sub-contractors. This meant that despite the fact that we had paid them, we were being contacted by their works asking for payment again. Alarmingly, this sub-contractor had also notified our resident, which made us inadvertently look as unprofessional as the people they were employed by.

When we contacted this company, we were met with defence, resistance, and a lack of customer service to discuss this topic or rectify the problem.

So how did we respond? We promptly took this contractor from our approved list, retrieved the funds and briefed another supplier to carry out the work at the same price.  Therefore, from the resident’s point of view, the work was completed to a high standard at the originally agreed price.

From our perspective, it gave us a wake up call. While we pride ourselves on having so many long-standing contractor relationships, we do still need to keep adding to our list of suppliers to meet new demands and cover wider areas. We thought our due diligence was strong enough but this incident has driven us to make it even stronger.

The board has since discussed the information we collect, the due diligence we do and the reviews we undertake when putting contractors on to our list and we have compiled new procedures for our maintenance team to make this happen.

Bring on the next issue…..we’re ready.

How to get the best from your managing agent

Had a bad experience with your managing agent? You are not alone. Research by consumer group Which? found that unfair practices can lead to as much as £700 million of unnecessary service charges being paid each year. What is more, in the summer of 2017, the UK Government announced it would be launching a consultation setting out radical proposals in order to restore power to the tenant and leaseholder.

Not only that, but a study by the Government found the following examples of poor management:

  • a London-based property agent who tried to charge a leaseholder almost £5,000 to transfer ownership of a parking space to other leaseholders
  • a group of leaseholders charged ten times the market rate to have a new fire escape fitted – with the £30,000 contract handed to the freeholder’s brother
  • one landlord charged £500 by his agent for repairing a shower door

Fortunately, not all managing agents behave in this way. Town & City Management Ltd, for example, has over 17 years’ experience of providing a responsive, effective, and transparent service to its clients and is working hard to improve the reputation of the sector.

That is why we have put together a guide to help you improve the service you are getting from your current managing agent. Alternatively, please click here to learn about switching to us. We would be delighted to help you.

 

How to get the best from your managing agent

Ensure clarity over what they should be doing

This sounds obvious, but far too often, expectations are not set correctly at the beginning of the relationship, ultimately leading to disappointment. Be sure to set out a clear brief at the start and get a full breakdown of everything else the managing agent intends to do to your property. This will then make it easier to assess their impact 6, 12 and 18 months down the line.

Also, make sure it is clear to the managing agent what they have authority to do. For example, if they are to be responsible for chasing late ground rent and service charge payments, what is the procedure they will put in place to do this and at what point do solicitors need to get involved?

They should also demonstrate a full understanding of all the leases for a building (as they may have different terms). If they do not have that understanding, help them. A little time spent doing this at the beginning will save you wasting a lot of time later.

It is also worthwhile discussing with them what your expectations of their service are or what you would perceive as “good”. This shall either help them to raise their standards to keep you happy or give them the opportunity to set you straight if any of your expectations are unachievable.

 

Get to know your contact and if you don’t like them, ask for someone else

 

To get the most from your managing agent, you not only need to trust the individual who is assigned to your development; you also need to want to work with them. This is because a successful managing agent contract does require your support and engagement, as well as theirs.

It may be the case that you have not met your contact yet. Perhaps a senior representative met with you to sign the deal and now you are left with another more junior member of staff whose preferred form of communication is email.  This is not good enough.

The managing agent acts as representative for you, as the landlord, and should always be acting in your interests, so there needs to be complete trust and clarity over everything being decided upon and communicated. How can this happen if you have never even met?

Make it so that you have regular and frequent meetings with them either face-to-face or by video call so that you can establish a solid working relationship and good level of trust. They should also share with you their working hours, response times and alternative contacts so you have peace of mind that you are represented 24/7.

 

All lines of communication should be open

 

Aside from face-to-face meetings which may happen no more than once every six months, do you have a way of communicating daily if you need it? How are they sharing urgent information with you, lessees, or tenants?

A number of agents have online portals which they use to store valuable building information, issue service charge or ground rent demands, and to get updates of issues or maintenance requirements, and this may be a perfect solution for you, particularly if you have a large property portfolio.

If this is not going to work for you, say so and find a form of communication that will work better.  And whichever platform you do opt for, portal or otherwise, make sure you try to use it as it could make your life easier, as well as your managing agent’s.

 

Get to know your lessees a little

 

Happy lessees mean a happy landlord because if a managing agent does not deal with a complaint appropriately, it may result in a claim against you to pay the losses the lessee has incurred.

Give your managing agent the opportunity to flag any issues they have faced with leases. If there are any breaches of lease, they should make you aware immediately, but it is also smart to ask to be kept in the loop of any properties they consider might become a concern.   If they seem to have a lot of concerns, then perhaps the problem lies not with your property but with its management.

We hope this guide has given you a fresh perspective on any woes your experiencing with your current managing agent. If you would like to hear more about our approach to block management, click here.

What should you pay for your property management?

There is an age old saying that “you get what you pay for”, meaning that if something seems too cheap for all the elements you should get in return, it probably is. This applies with property management. Managing agents, like any other business, have costs to cover to recruit and train the best staff; to purchase technology for communication with contractors and clients; for premises and materials; and to ensure they’re abiding by all of the necessary rules and regulations. Scrimp on these and you, as a client, could live to regret it.

That being said, there is no set fee for property management as the cost to manage a development depends on the facilities and features within it; the number of apartments; the level of maintenance and support required; and location. What is key however is that you, as the client, understand how much you are paying for your building management services and have full transparency from start to finish.

What are you paying for?

Typically, your service charge will cover the cost of general maintenance and repairs as well as improvement to the building and the grounds. This includes cleaning, gardening, guttering, painting, roof works and more. The service charge may also cover buildings insurance, electricity, and heating of the communal area. If the property requires security or porters, these would be covered under the service charge too.

For full details of our charges and to discuss how we might cost for your development, please contact us here.

The sinking fund

Your managing agent will also look to accrue a sinking fund or reserve to cover larger pieces of repair or maintenance work required for the development. This is important as it means large and essential repair work can happen quickly without the leaseholders needing to find thousands of pounds at short notice.

This element can often be the reason why so many leaseholders feel their managing agent appears too costly – the service charge is going up and they are not seeing a return.  However, if your managing agent is being transparent with you, and displaying this sinking fund and all expenditure on quarterly or half yearly statements then it should be clear where every penny is going and what exactly has been spent vs what is left over.

The service you do not see

The other element that your money is spent on – and this is perhaps one of the biggest reasons not to “go cheap” – is communication. You need a managing agent who is available 24/7 – not just during typical office hours as that is when you are at work. And if you need to contact them because something is wrong, an automated message will not do. You need a quick response from a human being who you can trust will deal with the situation effectively and quickly.

But it is not just about flagging issues, it is also about having someone available to attend board meetings, make site visits and not be overwhelmed by the other properties they must manage. They need to be able to dedicate their time and headspace to ensuring your property is getting the care and attention to thrive now and long in the future.

If you are reading this because you are looking for a new managing agent, cost will undoubtedly be one of your biggest factors in making your decision. If you can take anything away from this article, it is that you are not looking for the lowest figure; you are looking for the best price for what you will get in return.

Be aware that many managing agents will provide you with a cost that looks reasonable but strips out a lot of their services, that they will simply add back on further down the line. This means that elements that come as part of the package for some managing agents such as sourcing supplier quotes or making site visits, will be charged as an extra by another. This could make them a far more expensive option in the long run.

How can you tell a “good price”?

When considering several managing agents, ask them what is covered in the price i.e.  do they take commission on supplier services, what could possibly be charged on top of the price they’ve quoted you, how much communication and face-to-face time have they allowed for in that price and if more is required, will they absorb that in the price or charge more? It is also worthwhile asking if you can see an annual statement from another client to get a sense of possible extras.

The more information they can provide in response to these questions, the more likely they are speaking from experience rather than blagging to get your business. What you do not want is for an agency to take your business by overpromising only to fail to keep up on their promises further down the line and presenting you with hefty price increases. How can you forecast the cost of keeping your property if you do not have transparency from the beginning?

Finally, experience.

Another element you are paying for is experience.  New kids on the block will be basing predicted costs for your property on guesswork and quotes they have hastily gathered from untested suppliers. Experienced managing agents on the other hand are highly likely to have managed properties that match your development both in size and complexity and will be able to predict the required sinking fund with impressive accuracy.

Experience on the face of it costs more but if you choose a partner who does not know what they are doing, poor decisions may mean new work will have to be redone at vast expense a year later. Not only that, but experienced managing agents will have established relationships with the best contractors which means you receive the highest standard of work and at “mates rates” prices because it’s likely they have a contract in place to deliver on a number of properties; not just your development.

With 15 years of experience serving properties across the UK, we are immensely proud of the value we bring our clients and would love the opportunity to show you what high quality property management is. After all, we are the managing agent you’ll stick with.

Caring for your property during the Covid-19 pandemic

In our last blog post, we shared with you the actions we’re taking to ensure all of our clients’ properties continue to receive our care at this difficult time. But there’s plenty that you can do too, whether you live in the property or are letting it out to others.

Every day the UK gets one step closer to conquering this virus and when normal life resumes, we want to ensure that your property is in the best possible condition. Here’s how you can help us to do that.

Maintain good neighbourly relations and support others

While it’s vital that everyone follows the Government’s instructions on social distancing and staying at home, there are many ways that we are all still in contact with friends and family, through the phone, video conferencing and chat tools.

If you can extend this form of contact to neighbours, please do so. Connecting with neighbours or other residents/owners on your development is beneficial both in the short term and the long.

Supporting with grocery visits, identifying who might need extra help, or understanding if there are property issues common to a number of households is incredibly valuable. You could even find it a boost to your mental health to see some familiar faces on the weekly Clap for our Carers.

A WhatsApp group for all residents to check in on each other is a great way to get things started and could make life a little easier for everyone.

Ensure an open channel of communication between every resident and us

We remain open as usual at this time offering as many of our services as is safe to do so (see here for the latest update). However, as we are unable to make site visits as frequently as usual, we are more reliant on residents to report any issues or needs. If you let out your property, please ensure that we have contact details for your tenant so we can contact them and offer our assistance.  The sooner we can be made aware of an issue the more quickly we can resolve it, ensuring a speedier and potentially cheaper resolution. It also means we can coordinate the visits of our contractors to ensure their visits are as safe and as brief as possible.

We are also keeping a log of self-isolation cases and would appreciate you or your resident alerting us if symptoms arise.

In addition to this, by being in touch with all residents we are well placed to share information gathered by other residents which may be beneficial to the development as a whole such as local restaurants offering takeaways, supermarket deliveries or other valuable insight.

Support your local community

A property’s value is somewhat dependent on its location and an abundance of successful independent businesses in the local area can be a big plus. The pandemic will unfortunately force the closure of many small businesses which is why we must all do what we can to support local businesses (safely) during this time to ensure they survive.

As mentioned above, we’re happy to share details of local businesses offering help and services during the pandemic.

DIY with care (and think before you act) 

Bank holidays are a popular time to do some home improvement and with more time indoors than we’re used to, you might be tempted to go to extremes. Our advice is to plan any home improvements carefully and know your creative and DIY limits. You do not want to exacerbate an issue or start a job only to find that the tool shop is shut. 

What a lot of rubbish

The refuse collection services may be continuing but with clear outs in full swing across the country and all Waste & Recycling Centres closed, you may have more rubbish or unusual items to get rid of. Please be considerate of others when disposing of your rubbish in communal areas, ensuring they’re double bagged and exits are not blocked.  Please tell your tenants to do this if you’re not a resident of your property.

Work together within COVID-19 Government Guidelines

The Government may be calling them Guidelines but they are being enforced by police nationwide so they must be taken seriously. Be considerate and only leave your household for essential outings, respect social distancing with members of the public, including other residents in your building.

Stay at home, support the NHS and save lives.  Thank you from all of us at Town & City.