Managing a Property Can Be a Happy Experience!
Management companies have declined in popularity since the introduction of the Commonhold and Leasehold Reform Act 2002. However, says Mary Anne Bowring, managing property, if handled correctly, can be a happy choice for both the property developer/owner and for the lessee. Mary Anne should know for she is, as a qualified chartered surveyor, engineer and Governor of the Institute of Residential Property Management, managing director and founder director of Ringley Chartered Surveyors, a comprehensive property consultancy based in Camden, London. Over the last 10 years, she has driven the business forward to the point where, today, the company now manages over 6,500 properties for a number of clients, ranging from small developers to top 10 housebuilders.
Mary Anne goes on, many developers still struggle with unnecessarily managing their developments during the sales and early occupation stages. Some still simply hand over the management to the residents without a structure in place to maintain the quality of the dream they sold. Others do it in-house and find it hard to draw the line between sold as seen, past the handover, improvements and politics that they could be sheltered from. Particularly in the current market, management is something better outsourced as a good managing agent will resource the no fee period for free in return for a commitment.
Most developments are mixed use these days so a managing agents job is rarely purely residential, as the needs of office, restaurant and supermarkets all have to be balanced in the new worlds of city living. At Ringley, we often have to remind the likes of Tesco or plush restaurants that working with the residents above (who are probably their customers) must be their number one priority.
Often, it appears, problems arise unnecessarily because the developers try to involve managing agents at too late a stage. In Mary Anne's view, this should be done at as early a stage as possible. A managing agent should comment on the lease, will need to understand the Section 106 obligations, bats, newts, river works, planting schemes. A managing agent should provide several service charge options to match headline rates in the location, price per square foot and offer different apportionments (area, factor) and consider how these fit in with the marketing prices. A managing agent will provide a booklet on living at your development, she says. Here, we maintain a web area for every site and even attend sales offices to set this up and provide sales staff with passwords/training. A managing agent will meet with the refuse department and organise collections, for larger sites put a meet and greet concierge in place and, in the early years, a managing agent will deal with ensuring fairness in the service charge accounts. Yes, a developer should contribute towards voids, but there are likely to be bills they should be offering to put into the accounts to cover these, such as a proportion of insurance, utilities, gardening, while they are selling.
In addition to free consultancy and early management, we do not charge developers management fees on their units. A developers voids risks can be managed and their liability to contribute should only start from the date a unit is practically complete, perhaps the NHBC, Zurich or Local Authority completion certificate. Today, there are three ways in which a developer can sell the dream. The traditional freehold: leasehold where the freeholder appoints a managing agent of their choice and retains the usual freeholders responsibilities to repair, maintain, insure, collect service charge and as well as collect ground rent
To set up a Residents Management Company (RMC) so the freeholder can transfer his responsibilities to repair, maintain and collect service charge to the RMC, but retain his right to insure and receive ground rent
To set up a Freehold Management Company (FHMC) so after the last sale the freeholder transfers the freehold to the FHMC. This is much the same as above but popular where the location or price point demands a 125/999-year lease and peppercorn ground rent.
It is not just about big developments or city living at Ringley. Ringley created www.leaseholdersupport.co.uk and offer a national Small Blocks Solution- virtual managing agent that runs the budgets, demands and debt chases to get the service charges in. For larger sites Ringley's fully managed service covers London, the Home Counties and the South East. Some interesting appointments in 2009 include Morello Quarter - a Weston Homes development of 425 flats in Basildon with several roof gardens and bio-mass boiler- and a Millgate regency revival of a former John Nash/Humphry Repton development at Sundridge Park, Bromley. Other unusual features they manage include an old mill, AONBs, cricket grounds, private woodlands and river frontages.
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