Can a freeholder appoint a managing agent? 

Yes they can and often do. Developers often pre sell the ground rent on leasehold flats to developers well before the block of flats is finished. In this way they guarantee a bonus revenue stream over and above the profit margin they have forecast for the buid.

The press has taken a paricular interest in this recently due to indifferent developers incorporating into the lease that for exapmle ground rents can after 10 years. The UK government has now put a stop to this and effectively banned this from happening to the point that Help to Buy aided properties (now in the majprity) can no longer be sold with any ground rent charges. The market is now severley restricted and grond rent levels will now head towards zero. If you are happen to be a leaseholder who falls into this category your initial step would be to form a Right to Manage Company (RTM) to get initial control of the block with a view to buying the freehold (enfranchisement) at a later opportunity. 

Your landlord or Freeholder will initially appoint the managing agent for your development if your lease allows it. The lease will normally be a Two-Party Lease – between the freeholder/landlord and the leaseholder/property owner. It could be a dreaded tri-party lease which incoporated the freeholder appointed managing agent.

Options available
This type of lease makes it more complex for leaseholders to change their managing agents. Possible options available are:

Persuade the Freeholder/Landlord to change managing agents - amicably, this normally happens without much fuss.
For this to occur you will normally need to demonstrate that there are problems/issues/fraud with the current managing agent. The type of problems that may exist are:

– Managing agent is in breach of the Freeholder's obligations under the terms of the lease relating to the management of the estate.

– Managing agent is in breach of the RICS Service Charge Residential Management Code or the ARMA code of practice for retirement leasehold blocks.

– The service charges are unreasonable and unnecessarily inflated.

You will need to demonstrate to the Freeholder that the issues exist and document all correspondence. Do gain support from other property owners and if a residents association does not exist then definately set one up to gain a common voice for all residents. You can find out how to setup a residents association by contacting us in the form on this page.


B Knapp,