Directors of a newly formed RTM company may be both apprehensive and excited at appointing a managing agent and keen to see an immediate impact on their development. How can you, as the incoming managing agent, handle their expectations and ensure a solid start to your working relationship?
Colin Hussey, of Brady Solicitors, explains how managing agents can successfully manage leaseholder expectations, especially when dealing with early hurdles such as recovering outstanding service charge arrears.
Leaseholders embark on the Right to Manage route for a variety of reasons; they may be looking to reduce service charge costs, replace an underperforming managing agent or simply take more control of the maintenance of their block.
You’ve done the beauty parade and met the members of the RTM company. Most newly formed RTM companies will be filled with high expectations and big ideas. You have the task of balancing the reality of the block and their expectations.
The only thing that has changed is that the leaseholders now have the power to self-manage, choose their insurance provider and appoint a managing agent.
Problems such as the condition of the block, neighbour issues and any challenges created by the lease remain unchanged.
If the RTM company are expecting the block to be turned around overnight don’t feel you have to overpromise on anything. It is vital to be clear from the outset of your ability to make certain changes and establish achievable timescales.
Effective communication going forward will be crucial in developing a good working relationship with the RTM company directors and leaseholders.
Before you make commitments, ensure you have the resources and ability to meet them. The RTM Co has chosen you to manage their block, so it important that anything you agree to do can be maintained for the duration of the contract.
Well-drafted Terms of Appointment will help set out clearly what is expected from both parties in this agreement.
If outstanding service charge arrears are a problem, it is worth having this conversation as early as possible. Any outstanding service charge will impact on the funds you will have available for managing the block and will hamper your ability to meet the RTM co’s expectations. Do you and the RTM Co directors have a clear plan for the transfer and approach to existing service charge arrears?
Before you send out demands for arrears, we would advise managing agents to communicate openly with the leaseholders and outline any new credit control processes. Funds flowing into estates will ensure you have the service charge revenue to help you deliver on your pre-appointment promises!
Managing expectations is a huge part of a managing agent’s job especially when it comes to working with newly formed RTM companies. It’s a balancing act that requires careful consideration so both parties are confident in their obligations and service levels from day one.
Understanding the needs and wants of the RTM before the handover will you help to set and exceed their expectations long after your appointment is made.
Colin Hussey is Business Development Director at leading property management law firm Brady Solicitors