Flat-Living.co.uk Self manage or outsource


shareholders quarterly charges are wisely spent, providing exceptional value as the directors’ services are offered free to the shareholders. Half of the shareholders/residents are quite elderly and the directors act on their behalf and in everyone’s best interests”, says Michael. He explains that the house is surveyed annually by a builder who,


in conjunction with the property director, decides on the maintenance tasks required for the year. This includes the ancient roof, lead gutters, lead fall pipes, chimney and brick wall restoration. The large grounds are cared for by a family firm of contractors who cut the grass regularly and maintain the extensive copper beech hedges and shrub land for an agreed fee, which is reviewed annually. The drains, leaded windows and electrics are maintained and reviewed annually and dealt with as necessary. The company directors also arrange building insurance cover after a thorough survey and risk assessment by the insurer and broker and produce annual accounts through a registered firm of accountants. Stedham Hall poses a particular challenge in terms of management as


it is almost 500 years old and so requires constant observation and timely maintenance. As the income available to the management company is limited, the directors plan carefully in order to satisfy the needs of the house, gardens and residents.” Occasionally individual shareholders demand action in their own interests”, says Michael, ”however, nothing is done without the consent of the management team and the direction, control and briefing of contractors is strictly managed”. Michael admits that to self-manage is a huge commitment of time and


energy. “What makes it worthwhile is the fact that all the residents have a passion for the property and grounds. From a personal perspective I act as if I were the sole owner. If I get it right, all the shareholders will be more than satisfied …which I’m pleased to report they are”. The Stedham Hall residents are clearly happy with their decision to self-manage. They have compared the cost of outsourcing and found that leaseholder’s contributions would more than treble if the building were managed by a property managing agent. Without doubt, however, in order to self-manage successfully, those involved must be strong, positive, determined, committed and prepared to devote time and energy in representing the interests of others. Michael confirms this is the case at Stedham Hall: “A wishy, washy committee dealing with a group of leaseholders would be like cubs and brownies fighting the Taliban!”


CASE STUDY: ROCK GARDENS, BOGNOR REGIS


Phil Dobby and his fellow residents at Rock Gardens on the seafront at Bognor Regis in West Sussex have taken the opposite approach to Stedham Hall. They are happy to use a professional property manager and work closely with staff at the local office of Parsons, Son and Basley which is a firm of chartered surveyors specialising in property management in the south of England. However, this hasn’t always been the case. As Phil explains, it was residents’ dissatisfaction with their previous agent


The managing agent’s view By Anthony Tokatly, JJ Homes


I always ask prospective clients who have been self-managing or Directors who are considering it – “are you experienced in property law, accounting, engineering, personnel, insurance and maintenance?” The answer of course is invariably a resounding no. If this lack of expertise is not enough how about – “Are you happy knocking on your neighbour’s door to remind them they are six months behind in service charge and potentially facing them in court?” Try this one:


“would you like to be sued for negligence for not complying and following through on the health & safety report you have recently


that led them down the Right to Manage route. There are 69 flats at Rock Gardens and a mix of owner-occupiers and


tenants – although the latter are in the minority. The building does not present any particular management challenges but faced with a 20% overspend on maintenance and an agent who appeared powerless to enforce the lease conditions when some leaseholders wouldn’t stick to the rules, Phil and his fellow residents took matters into their own hands. “As a result of RTM, we are now in control,” he says. Once the decision to go for RTM had been taken, one of the residents’


first tasks was to appoint a new agent. With so many flats in the block there was no question of self-managing the property, says Phil, who firmly believes property management is a job for a professional. We looked at a number of candidates and based our decision on four key criteria. We wanted our new agents to be:


• Locally based; • Able to demonstrate their ability to carry out budgeting and financial reporting in an orderly manner;


• Competitively priced; • Fully experienced in property management.


“The agents we are now using not only met our expectations but exceeded them because they have skills in-house in addition to property management and so we have been able to use their advice and contacts to help set up our RTM company, establish the board and get to grips with what our new obligations are as leaseholders,” he says.


sanctioned?” What about: ”have you got the bulk buying power and leverage to secure water-tight buildings insurance policies to ensure your residents pay less premiums year on year?” The questions go on and on, and clearly anyone considering self-management needs to be truly dedicated to the role and I will guarantee they will not have anytime for anything else in their lives. You’re relying on volunteers to do or volunteers to supervise. That’s not easy. One of the problems with an unguided, self-managed board is they don’t understand what their legal obligations are and they don’t understand how to maintain a property, create budgets, etc. Yes outsourcing costs a little extra but should be seen as a shrewd investment for any property owner - to pay a nominal fixed annual fee, their most valuable asset will be managed, maintained and future proofed by experienced professionals whose sole purpose is to increase the value of property through effective and pro-active management.


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