Why It's Important to Re-Tender Your Managing Agent and How to Do It Effectively

However, just as businesses regularly review and renew contracts with suppliers or service providers, it is equally important to reassess your agent’s performance periodically.

Re-tendering your agent can bring significant benefits, from improved service levels to cost savings. In this blog, we’ll explain why re-tendering is crucial and the key reasons to do it.

1. Cost Efficiency and Value for Money

One of the most compelling reasons to re-tender your agent has the potential for cost savings. Over time, contracts can become outdated or less competitive. The market naturally evolves and new service providers may offer more efficient solutions, better value for money, or enhanced technology platforms which reduce operating costs.

By seeking new tenders, you can:

• Benchmark fees against competitors.
• Identify more cost-effective ways to manage the property.
• Ensure the fees paid align with the level of service and quality provided.

2. Improved Service Levels

The quality of service can fluctuate over time and a long-standing relationship with an agent doesn’t always guarantee that they are still the best fit for your needs. Re-tendering gives you the opportunity to assess the service levels offered by your current agent against those of potential new providers. You can ensure the agent understands the evolving needs of your block and can adapt their approach accordingly.

An effective agent should not only take care of day-to-day issues but also proactively manage issues before they escalate, provide clear communication, and be responsive to residents' needs.

3. Changing Needs or Expectations

Over the years, the needs of a residential block may change, or your tenants’ expectations have shifted. Re-tendering allows you to find a managing agent which better understands the new needs of the block and is better equipped to meet these demands.

This is also an opportunity to reconsider the level of involvement you need from the managing agent, such as greater focus on sustainability, smarter building technologies.

4. Compliance and Risk Management

Property management involves a multitude of regulations—from service charge collection, health and safety, employment laws to environmental standards and local building codes. The legal landscape changes on a regular basis and an agent needs to be up-to-date on compliance requirements. Re-tendering gives you the opportunity to assess how well your current agent manages legal obligations and identifies if there is room for improvement in areas such as risk management, insurance coverage, and health and safety protocols.

5. Relationship Management

It’s important to ensure the relationship between the agent and the residents is healthy. If there are ongoing issues with communication, responsiveness, or general management, then a fresh start and change in personnel or a change in approach can reinvigorate a relationship which has become stale or strained.

How to Effectively Re-Tender Your Managing Agent

Re-tendering is not a simple, one-step process; it requires careful planning and execution. Here's a step-by-step guide on how to re-tender your residential block managing agent effectively.

1. Assess Your Current Situation

Before you even begin the re-tendering process, take a step back and evaluate your current managing agent’s performance. Consider:

- Are there any ongoing issues which have been neglected or poorly managed?

- What works well with the current agent? What could be improved?

- Are there new services or technologies you might want to incorporate?

This assessment will help you determine your priorities and what you expect from the new managing agent.

2. Create a Clear Tender Brief

Once you have a clear understanding of what you need, create a detailed and comprehensive tender brief. This brief should outline:

• The scope of services required (e.g., maintenance, financial management, tenant relations, etc.).
• The specific requirements and expectations of the block.
• Any particular issues the current agent is not addressing, which need to be improved.
• Your preferred service level, communication protocols, and frequency of reporting.
• The criteria for assessing tender responses, including pricing, experience, and references.

Be as transparent and specific as possible in your tender brief to ensure all applicants understand what you are looking for.

3. Invite Multiple Tenders

Invite a range of managing agents to tender for the role. You can find potential candidates through recommendations, professional property management associations, or online platforms. Aim to create a competitive bidding process which includes at least three or four companies, so you can get a broad sense of the market.

It’s important to ensure the tender process is fair and transparent, and all agents have the same information and access to any relevant details about the block.

4. Evaluate the Tenders Thoroughly

Once you receive the tenders, evaluate each submission based on the following criteria:

• Price: Is the fee structure competitive and aligned with the level of service proposed?
• Experience and Track Record: Does the managing agent have experience managing similar residential blocks? Check their references and ask for case studies.
• Service Delivery: How well does the agent align with your expectations regarding communication, problem-solving, and overall service quality?
• Compliance and Risk Management: Does the agent have a strong understanding of regulatory requirements and insurance needs?
• Technology and Innovation: How well does the agent leverage technology for reporting, communication, and maintenance management?

5. Interview Shortlisted Candidates

Invite the most promising candidates to meet with you and discuss their proposals. This is an opportunity to clarify any doubts, ask specific questions, and gauge the personality and professionalism of the agent. It will also give you a sense of how responsive they are to your needs and how well they communicate.

6. Negotiate Terms

Once you’ve selected a preferred candidate, negotiate the contract terms. This should include clear service level agreements (SLAs), reporting obligations, performance metrics, and penalties for poor performance. It’s also important to set out expectations for communication and transparency throughout the duration of the contract.

Ensure the managing agent understands any specific needs or challenges your building may have and that they are committed to meeting these requirements.

7. Communicate the Change

Once a new managing agent is appointed, communicate the decision to all residents and stakeholders. Ensure they understand why the change is being made, how it will benefit them, and who to contact for any queries. Make sure there is a smooth transition in terms of information sharing, account handover, and management of ongoing issues.

Conclusion

Re-tendering your residential block managing agent is an essential part of ensuring that your property continues to be well-managed, cost-effective, and compliant with regulations. By periodically reassessing your managing agent and seeking fresh bids, you open the door to improved service quality, cost savings, and better alignment with your block’s evolving needs.

Approach the re-tendering process thoughtfully—evaluate your current agent, set clear expectations, invite competitive tenders, and engage in thorough negotiations. By doing so, you can ensure your property management remains in the best possible hands. 

John Ward, Managing Director, Insight Property Consultancy Limited