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Residential Block Management

March 2012
Residential Block Management

Rokib Uddin - I often get asked what it is that I do as a residential block manager, and when I was asked to write this piece for our website, I could not think of a better topic than an introduction to residential block management and the role of the managing agent.

Essentially, residential block management is the practice of managing the common parts of blocks of flats, ranging from the management of service charges, financial control and insurance to building maintenance and repairs, answering enquiries from solicitors during property sales, providing company secretary duties and advice to help run freehold or resident property management companies as well as additional services such as project management, to name but a few.  

Why Do Residential Blocks of Flats Need a Managing Agent?

Growth in the number of new developments of blocks of flats has increased demand for professional advice in the specialist field of residential block management.  Residential block management is a largely hands on and time consuming process. In addition to specialist knowledge of the extensive legislation and regulation, it demands significant effort, time, organisational skills and care. The block management agent is therefore in increasing demand to assist freeholders, landlords and property management companies in carrying out the necessary duties in looking after their block of flats.

Building Repairs and Maintenance

Managing agents should arrange for the buildings' fabric to be regularly inspected, maintained and redecorated to the required standards in accordance with the lease.  Cyclical maintenance must be implemented at the required times to meet current regulations which requires specialist property/facilities management.  Assessment of any necessary work or repairs may require inspection and professional expertise. Monitoring and approving the finished job may demand a qualified surveyor.  Work will not always be properly executed and some members or lessees may well refuse to meet the costs at the expense of the property management company service charge account.  Such payment problems and disputes over finances can cause friction amongst those responsible for the management of the block and leaseholders as well as placing pressure on available reserves and cash flow.

Robust systems must be put into place by the block management agent to plan and smooth the way for the future.  These management company procedures are essential and should include budgeting and collecting monies required for works and services.

Service Charges and Accounting

A block manager will need a full understanding of how the lease permits the maintenance charges to be raised, in advance or arrears.

Arrangements must also satisfy current property services legislation covering service charges.  It is a requirement that there must be sufficient accounting procedures in place to provide final accounts and the annual statutory summaries to the leaseholders. The recent technical release by the ICAEW in conjunction with the joint working group comprising of members from the Association of Residential Managing Agents (ARMA) and the Royal Institution of Chartered Surveyors (RICS) provides best practice guidelines to this complex facet of residential property management.  

The block managing agent is responsible for ensuring that accounts are clearly defined, protecting leaseholder funds in a suitable client account for the sole purpose of maintenance and management of the property in accordance with the lease and relevant statute.

Lease Management and Compliance Procedures

Other block management duties cover lease compliance issues.  

Restrictions and obligations must be enforced where a resident is in default of his or her lease.  This could be anything from non-payment or arrears of service charges or breach of a clause of the lease for nuisance.

Management agents can provide important advice in resolving such matters.  After all, it can be difficult and awkward to challenge your neighbour on such matters.  Resident management companies may well feel uncomfortable taking legal action against a fellow leaseholder and consider such actions would be better carried out by an independent block management professional.

Using its wealth of experience, a block management agent must therefore deal with the various issues and problems that might arise helping to facilitate more efficient lease management and compliance procedures.  It is clear that block management property services can prove immensely popular with time pressed landlords, directors and leaseholders of block management companies.  However, the landlord or management company must choose carefully to avoid a sub-standard and unprofessional experience.

So, if you still consider that you can manage your block of flats without a specialist block management agent then it is clear that commitment will be the key.  Many management companies, of course, take the easier option and choose to employ professional help.

The Advantages of Employing a Property Block Management Agent

Through the application of a broad range of skills, the managing agent can secure added value for both the management company and the leaseholders. However, management companies and residents seeking out the benefit of these services should tread with caution.  Not all of those block managers out there are properly qualified and many operate to standards which fall well short of that expected.

Any competent professional acting on behalf of landlords, freeholder or resident management companies should be properly qualified and experienced to do so. It is easy to check a firm's credentials and the professionals in the property services market are usually very pleased to confirm their expertise.

Regulation of Property Managing Agents

For residential property services, the management company should seek out the benefit of those managing agents who are regulated by the RICS. Alternatively, the managing agent could be a member of ARMA.

The formation of the Institute of Residential Property Management (IRPM) has also provided much needed regulation of individuals engaged in block management and is fast becoming the measure with which the industry decides on an individual's competency to offer professional services in the area of block management. 

The competent block manager should comply with the RICS Service Charge Residential Management Code. Additionally, members of the RICS and IRPM are subject to further controls and scrutiny from their respective institute for the benefit of clients. These extra regulatory measures help to provide extra safeguards, security and peace if mind to all involved.

Where can I find a quality block management firm?

The RICS, ARMA and the IRPM can provide a list of firms and individuals respectively engaged in the provision of specialist block management services.

Rowland Jones Chartered Surveyors has a wealth of experience in this field and has been providing specialist block management services throughout South and West Wales for over 20 years. Its residential block management department boasts membership of RICS and IRPM ranging from FRICS, MRICS to MIRPM qualified members. We are therefore well placed to provide and advise you on the increasingly complex area of residential block management.

Rokib Uddin LLB (Hons) MIRPM AssocRICS

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