APPOINTING A MANAGING AGENT


includinginsurance if this is somethingyou wantthe agenttoarrange foryou. Agents shouldn’ttakeany commissions fromservice contractsunlesstheyare agreed in advance by


theRMC directors. nHowoften will youget financial reportson servicechargeincomeand expenditure? Will you be able to see the invoices and receipts documents at regular intervals? Once youhaveashortlist of agents,speak


to theRMC directors in other blocksmanaged by those agents. Howhappy are they with the servicetheyare getting? Don’tforgettocheck outany references or testimonials youhave been given.


the right insurance? It is importanttoconfirmany prospective agent’s professional indemnity insurance. If theagent isamemberofaprofessionalortrade associationPII will be an automaticcondition ofmembership. However, the existence of thecover –and itsscope –shouldbechecked. Where anRMC/RTMCodelegates taskstoa managing agent, theresidents’company will stillbelegally liable forany neglect,omission or mistakemade by theagent.Soyoumust


With the best Will in theworld, sometimes a relationship just doesn’t have a future. If you find that yourmanaging agent isn’t providing theservice you need, or you simply don’t get on with each other then it is probably best to cutyour losses andmove on.But howeasy is it to terminate your contract? First, check your


managementagreement. The terms and conditions should setout theperiodof


notice required for you to terminate your contract. If thereisnoperiodspecified, you and your fellowRMC directorsmust decidewhat period of timewould suit you best. Important aspects to consider include: nIf it is appropriate, arrangetoterminateyour agreement on a date that fits in with service charge payment periods or the end of the accounting year to make handover and accountingeasier. nWhat is the current


Doesmyagenthave


comparingappleswithpears.Manyagentswillquote alowmanagementfeebutderiveallsortsofother incomefromthemanagementofadevelopment, whereasotherswillchargeanall-inclusivefee. Leaseholdersshouldtotalupallfeesreceivedbyan


agent inordertomakeapropercomparison.” BenJordan,managing director, Premier Estates


be sure that theagent has themeans to pay compensation or damages should the worst case scenario unfold.


Working to


coDes of Practice Anymanagingagent youappoint should work in accordance with approved CodesofPractice. The government has to-date, approved two codesfor useinthe residentialleasehold market. Oneisproducedbythe Association of Retirement HousingManagers(ARHM)


Whathappensif itallgoesWrong? financial positionofyour


block – is the service charge account in credit or debit? nArethere large,


outstanding arrears that will make it difficult foranother agent to provide services? If you are not sure, ask the current agent.


nIs your existing agent owed any unpaid


management fees thatmay be disputed?


nWhat documents will be handed over to the new agent


agent so thatmanagement can carry onsmoothly? Drawup a list ofwhat yourequireor ask the new agent to


propose a list.


nWhat


sort of accounting statement will be drawn up as at the date of termination?Doyou need an external accountant to check it and if so,who will pay the fee? Thesepractical aspects of


propertymanagementand service chargeaccounting areveryimportant andif dealt with correctlywill save a lot of time and effort allround.Neversimply appoint a newagent and expect him/her to sort out amess. TheRMCdirectors


should try to establish the true extent of any previous or existing problems and be honest with the newagent about these issues and the reasonswhy they have occurred. Dealing with messy handovers from the previous agent is not part of your newagent’s remit – if you leave him or her literally to pick up the pieces, you mayfind yourselves with an additional feebeforeyou have started working together.


● Don’t expect your new agent to pick up the pieces 48


andone by theRoyal InstitutionofChartered Surveyors(RICS)and they aretobeusedby agents workingfor flatownerspayingvariable servicecharges,not on retirement schemes. When appointing an agent, always ask the companytoconfirmthatitcomplieswiththe relevant code.


DraWing uP a contract Whendrawing up acontractwithyouragent, youhavetwo choices.Eitherask your solicitor to draw up the contract for you or ask the agent to useone of severalmodelsdeveloped by the relevantprofessionalbodies. Thesecovermost situations andcan be adaptedtosuitthe needs of your block.Make sure youinclude in the contract alistofdocuments that will have to be passed on if thecontractends. No agentcan work in avacuum. It is critical


to thefuturesuccessofyourrelationshipwith your agent that certain arrangements are


established at the outset. These include: nWhat responsibilities andauthorities the


agent will have; nHowmuchservice chargemoney they canspend withoutthe authorityoftheRMC


directors; nResponse times and other timescales for


action; and nTheauthorisedlines of reportingand communication. It is also vitaltodeterminewhowillbe


instructingthe agent–thissoundsobvious but it is easily forgotten. Propertymanagers can’t work if givenconflictinginstructionsfrom anumberofdifferentpeople. Appointone or twokey contacts andensurethe agentknows to refer to themif he or she is asked to do anything by someoneelse. It is also important to remember that your agentcannotaccept instructions fromanyone,whether anRMC director or a flat owner,which would put him or her in breach of any landlord and tenant law, code of practice or other statutory guidance such as health and safety legislation.


askarma ARMAproduces a very useful guide to Appointing aManaging Agentwhich provides RMC/RTMCos with plenty of background informationonthissubject as well as achecklist of useful questions to ask prospective agents,achecklist of services and asampleletterinvitingtenders forproperty management.Todownloadacopyfreeof charge, go towww.arma.org.uk●


Summer 2012 Flat Living “Comparingmanagingagents’chargescanbelike


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64