Residential Block Management Guide for Central London

If you are the owner of a leasehold flat in Belgravia or South Kensington, or a considering investing in a central London flat, you might want to consider using a block management service.

Block management companies, or residents’ flat management companies (RMCS), provide management services for residential leasehold buildings. This article looks at what block management companies do, why you might use one, and how to find a reputable provider.

What is a residential leasehold?

When someone purchases a flat that is part of a building or development, they are likely to be entering into a leasehold agreement.

A leasehold gives the purchaser the right to occupy the property for the period specified in the lease.

The freeholder owns the structure and common parts of the building and the land it stands on, sometimes also referred to as the landlord.

A lease is a contract that sets out the rights and duties of both parties. The freeholder is responsible for maintaining and repairing the building structure and communal areas and insuring the building itself. The leaseholder will agree to keep the property in good order, pay the service charge and ground rent, and abide by the lease restrictions and consents.

Some developments are sold as ‘share of freehold’, which means that the purchaser owns their leasehold plus a share in the property’s freehold. Generally, this done by creating a company that owns the freehold and each of the leaseholders owns shares in this company.

Residential buildings take a lot of managing. It’s not just the building and finances; countless laws must also be complied with. Because of this, freeholders, or freehold companies, usually appoint an agent to manage their block.

What services do block management companies provide?

Block management companies are engaged by the freeholder or freehold company to deliver the services under the terms of the leasehold agreement. There is no definitive list of services because no lease is the same; however, typical block management service includes:

1 Block Maintenance

A block management company is responsible for maintaining all areas of shared space, including the building itself and any garden areas.

Agents have relationships with a wide range of repair and maintenance professionals so they can deal with emergencies quickly and efficiently. They can also plan and implement longer term maintenance and repair programmes, ensuring a streamlined approach to maintaining the value of your block.

Residential managing agents will also manage maintenance contracts with third-party providers.

2 Residential block insurance

Management companies will ensure that the property is fully protected by insurance and that the cover is renewed.

This insurance generally covers:

• Buildings insurance for the structure of the property, including walls, roof, floors etc.
• Legal expenses to cover the cost of legal fees if there is a dispute with a tenant or third party
• Liability insurance which covers legal claims if a tenant or visitor to the property is injured in the property and claims against the landlord

In addition to this cover, some insurance policies may cover emergency repairs and services. For example, locksmiths if a lock is damaged or tenant is locked out. Emergency plumbing and electrical repairs may also be covered under emergency service insurance.

Want to know more about lettings? Explore what an energy performance certificate means for central London property and read about the new Renters Rights Bill explained for landlords.

3 Tenant vetting & contact

Management agents will vet new leaseholders for suitability and will manage ongoing relationships. The agent becomes their first point of contact, answers questions, liaises with the residents and tenants’ associations and deals with insurance claims.

4 Financial management

Agents providing residential block management services will deal with both the day-to-day tasks of collecting service charges and paying employees and contractors and the periodic tasks of managing budgets and maintaining accurate accounts.

5 Complying with legal rules

Managing agents keep up-to-date with the continually changing legislation concerning residential properties, saving you the trouble of working out the implications of each new piece of legislation for your block. Block management agents can also take on ensuring that tenants comply with their leases and represent you should any county court, arbitration, or tribunal hearings arise.

6 Hiring block management employees

Running a block requires hiring employees, for instance, cleaners, gardeners and concierge staff. Under employment law, all these employees must receive appropriate contracts and fair treatment. Again, this is a task that a managing agent can undertake.

7 Site visits

Site visits are essential to ensure no maintenance or health and safety issues exist and that the block complies with regulations. A block management company will conduct regular visits to ensure that all the common areas are in good working order.

8 Compliance with Health and Safety

Managing agents will help to ensure compliance with legal responsibilities including health and safety, which can prevent landlords from facing legal disputes.

Many apartment blocks were designed with cladding used in the construction of the exterior. Since the Grenfell tragedy, the safety laws around cladding materials have been strengthened to help prevent the fast spread of fires throughout blocks of flats. A managing agent should be completely familiar with all the latest cladding regulations and other health and safety regulations.

They should also ensure that fire risk assessments are conducted and any potential hazards are remedied immediately.

Advantages of using a managing agent

Using a managing agent has many useful benefits for landlords:

Saves time

Managing a residential building is time-consuming and requires professional skills. The block manager needs to spend time understanding landlord and tenant law, health and safety regulations, building maintenance, accounting and much more.

Improved maintenance quality

Having a block manager means that someone will take active responsibility for regular maintenance and the building is kept in good condition. For landlords, this will also help to ensure property value is not affected by poor maintenance.

Both freeholders and leaseholders have an interest in the building being well managed as a poorly managed property will impact the buildings value and the leaseholder’s enjoyment of their home.

Proactive maintenance to reduce costs

Instead of waiting for an issue to arise, most managing agents work with a proactive approach to maintenance. For example, they complete checks of the building to identify any potential issues before they become a bigger problem. This can reduce the cost of repairs if actions are taken quickly.

Issues rectified quickly

Having a central contact for all maintenance issues helps to ensure residents know how to report issues and then the managing agent can take swift action.

The agent will usually have a network of maintenance contractors who will be able to quickly rectify issues. There will also be a fast response for emergencies, giving tenants peace of mind.

What about Right To Manage (RTM)?

Leaseholders can apply for the Right to Manage (RTM) from the freeholder. This transfers responsibility for maintenance, repairs and other general management activities to the leaseholder.

To obtain the Right to Manage, the leaseholder(s) will need to set up a RTM company, send a formal invite to other leaseholders to join and apply to the freeholder.

You might want to do this if you are not happy with the management services that the freeholder is providing, or you feel that you could reduce the costs charged to the leaseholders. You can then use a managing agent to provide the services that you require and have direct contact with them.

What block management software exists?

To make working with your block management company more streamlined, check whether the company uses block management software. There are solutions such as MRI Software, Buildium, App Folio and DoorLoop that can simplify tasks such as reporting maintenance issues, financial transactions like service charge collection, report generation and tenant screening.

Want to find out more about lettings? Learn about buying property through a limited company in central London and find out how to check a tenant’s right to rent.

How do I find a good block management company?

One of the best places to start your search for a high quality property management company is to gather recommendations from other landlords in the area. In addition, these are some of the steps to take:

1 Be upfront about your block

Without adequate detail, potential agents cannot give you a fair and accurate tender for the job. Show them the tenancy agreements, leases and service charge arrangements. Discuss the block’s past and present problems with them. How they react will clue you as to whether these are people you can work with.

2 Check they have the right insurance in place

Ask the agent to share their insurance policy details so that you can be sure that they have the right level of cover for everything you need. This should include buildings insurance, liability insurance and legal expenses, as a minimum.

3 Look for specialist qualifications and experience

When you are choosing a managing agent, check what qualifications and experience they have of working with similar clients. There are no formal qualification requirements but reputable property managers will have recognised industry qualifications to demonstrate their expertise.

Membership of the Institute of Residential Property Management (IRPM) is a good indicator that the agency is professional and adequately qualified to deliver a high standard of service. Also, check whether they have qualifications for health and safety, or are members of RICS.

4 Explore reviews and references

A good way to check the experience and standards of a managing agent is by checking their online reviews and any references. You can check reviews on sites like Trustpilot, Google Reviews, Facebook Reviews etc.

You will be able to see the ratings and feedback that previous and existing clients have left about them to give you a good idea of whether they will provide a high level of customer service.

5 Carefully examine the management agreement

Before you enter an agreement with any company, make sure that you spend time reading every detail of the management agreement.

You may even want to get a legal expert to review it in case there are any issues you might overlook.

Questions to ask before accepting a block management company

Below we have provided a helpful list of questions across key areas of block management to help you understand what a provider is offering – and to allow you to assess it properly:

Experience & Accreditation:

• How many similar blocks do you currently manage?
• Are you accredited with ARMA (Association of Residential Managing Agents) or RICS (Royal Institution of Chartered Surveyors)?

Fees & Charges:

• What are your management fees, and are there any undisclosed charges?
• How do you charge for major works and additional services?

Legal & Compliance:

• How do you ensure compliance with leasehold law, health & safety, and fire regulations?
• Do you have experience handling Section 20 consultations for major works?

Maintenance & Repairs:

• How do you handle day-to-day maintenance and emergency repairs?
• Do you have a network of vetted contractors, or can we use our preferred suppliers?

Financial Management:

• How do you handle service charge collection and budgeting?
• Do you provide transparent financial reporting, and how often?

Communication & Responsiveness:

• What is your response time for tenant queries and complaints?
• Will we have a dedicated property manager, and how often will they visit the site?

Contract Terms & Exit Strategy:

• What is the length of your contract, and what are the termination terms?
• How do you handle the transition from a previous managing agent?

Insurance & Risk Management:

• Can you assist with arranging buildings insurance and claims management?
• How do you manage risk assessments and liability?

Resident Engagement:

• How do you keep leaseholders and tenants informed about management decisions?
• Do you facilitate resident meetings or AGMs?

Dispute Resolution & Legal Support:

• How do you handle disputes between leaseholders or with the freeholder?
• Can you provide legal support for leasehold or service charge disputes?
• Brainstorm a list of questions before meeting the potential agent so that you don’t forget anything you planned to ask.

Fine-tune the contract details

An experienced agent will take you through a draft contract, customising it for your particular needs. You should cover everything from who has the final say on the appointment of contractors to the arrangements should any legal proceedings with tenants occur.

We can help

Our established block management department acts on behalf of both freeholders and freehold companies for a growing number of prime central London properties.

Not only are we responsible for the physical management of the property, but our service also includes:

• Accounting and financial control
• Regular property inspections
• Management of maintenance contracts (e.g. for lifts and entry phones)
• Dealing with enquires from tenants
• Administration of major works
• Company secretary duties

We can manage both large scales residential developments as well as smaller properties. Our approach and standards are the same regardless of the size of the development. Click here for more information on our block management services in Knightsbridge, Westminster and Pimlico.

If you own a residential leasehold building and think we could help, our block management team would be delighted to speak to you in more detail about the services we provide. Contact us today.