If you’re entrusting the care of your bricks and mortar assets to a property management company, you need to choose a safe pair of hands. With a host of options available and as residents’ needs and demands continually evolve, choosing the right property management will play a key part in you creating a legacy building project. Leading UK property and estate management services company, Encore Estate Management offers some helpful guidance on the subject of property management, with ten easy to follow points.
Property management is not regulated, so anyone can set themselves up in business without having any real knowledge or expertise in the industry. Disreputable firms which overcharge or fail to fulfil their obligations damage everyone’s reputation, particularly that of developers who could then become the subject of complaints and bad publicity. So the first piece of advice is to always look for a business that is a member of ARMA (the Association of Residential Managing Agents).
Companies which join ARMA must have at least two years’ experience, have Professional Indemnity Insurance and agree to follow a code of conduct that involves adhering to 180 different standards. The organisation has a complaints procedure, and as all members must belong to an independent redress scheme, you can have peace of mind that you are dealing with professionals.
Management companies often specialise in particular property types; so it’s important to make sure that your chosen agent not only has overall experience of working in the industry, but also operates across a range of different properties. The challenges involved in managing an inner city high rise building are going to be very different to the kind of issues likely to arise on an estate in the countryside, so look for a management company that has a breadth of knowledge and experience in similar property types to your own.
Property management is about a lot more than cutting grass, changing lightbulbs and mopping corridors – a good agent will have a complete understanding of complex landlord and tenant law, building construction and maintenance, health and safety regulations, finance and more. Even the person who is actually involved in mowing the lawns, replacing the bulbs or cleaning will need to know about a whole stack of regulations and how they apply; from Working at Height and Manual Handling rules, to Personal Protective Equipment, Electricity at Work and, of course, COSHH Regulations for all those cleaning products. It’s a litigious world out there and the last thing you want as a property owner is to be involved in legal action because someone you employ was unaware of the law.
Problems don’t always happen from 9am to 5pm on a weekday, so it’s important to consider how responsive an agent is able to be. Do they have a 24-hour helpline so that tenants can report a dangerous situation? Do they promise (and keep to) guaranteed response times to maintenance issues or replying to emails? Can you get hold of someone on a mobile phone out of hours if necessary?
Often management companies call in tradespeople on an ad hoc basis to do tasks such as gardening, window cleaning and odd jobs. Depending on the location and specific development, this is not always the best approach. Sometimes, it can work in your favour to choose a company that has its own staff who become familiar faces and a regular point of contact.
Encore for instance, depending on the location, can provide an in-house team of vetted, multi-skilled, uniformed caretakers and porters who are responsible for a particular estate or development, and take care of most of the routine maintenance, gardening, cleaning and repairs themselves. This means that porters and concierge staff also handle deliveries and hold keys to provide access for tradespeople. Tenants see them week in, week out and build up a relationship of trust, leading to higher standards overall. Although, Encore adds, they do on occasion work with local out-of-house teams for specific developments that are perhaps a bit more remote and where having an inhouse team would not prove economical.
Sometimes, of course, it’s inevitable that a specialist will be required on site; so you need to look for a property manager who will source, accredit and manage contractors properly. A good agent will make sure that every third party business working on your property has all the relevant insurances and accreditations and complies with statutory regulations. They will take up references, demand risk assessments and keep a full register of relevant paperwork for every expert who works in the building.
Unreasonably high maintenance charges on new-build homes have been the subject of a lot of leaseholder complaints and press controversy. Stories of massive bills with no explanation have made buyers fearful of leasehold properties and have damaged the reputations of unwary developers. For this reason it’s vital to ensure that any management company you choose is committed to delivering reasonable fees and providing full financial accountability and transparency.
Look for a company that will collect service changes reliably and hold them in a client account specifically for each estate, and that will also keep a separate sinking fund for each estate that should pay interest. Make sure that both the service charges and the sinking fund fees are set at realistic levels and are based on sound financial forward planning, and that annual accounts are properly audited, for each estate, by a chartered accountant. Obviously, it goes without saying that you should know exactly what you are paying for, and make sure it is suitable for a particular development.
Where an estate in a country village might need little more than basic grass cutting and maintenance; leaseholders of today are increasingly attracted to developments which offer an almost hotel-like ambience, and are prepared to pay an enhanced service charge for facilities and services that make their lives easier. They might want a communal gym, pool or sauna, or need an on-site concierge service to handle their mail and their online grocery delivery. If you want to offer these kinds of perks to occupants of your development, then you’ll need to look for a management company with experience in providing a full service and in sourcing and vetting trustworthy staff.
Building sustainable communities benefits everyone, and the right management company can go a long way to help. Can they provide movement sensors or timers in communal areas so lights only work when they are needed? Can they ensure that recycling facilities are adequate and well-maintained? Do they use rainwater collection and mulches from recycled tree cuttings in the garden to avoid wasting water? Taken together, little things can have a big impact.
Ideally, you should be thinking about taking on a management company for the long term, says Joaquim Fillola, MD of Encore Estate Management: “What you really need is a business that will care of your property as though it was their own. We’re not just looking after assets; ultimately we are looking after people; helping to build communities where people feel happy to live. We cannot forget that every development is unique and its residents will equally have different requirements so a one size fits all approach is not going to work. A good management agent will be able to cope with all the day-to-day issues of managing a development whilst remembering the bigger picture.”
This article first appeared in ShowHouse magazine. If you're a developer and would like further advice on how to get the best out of your managing agent - or think that your current supplier isn't up to scratch please get in touch.