In this Q&A session we find out just how easy it is to change your managing agent to PMS Managing Estates and the benefits you will see when you do so, with Liam Furr.
I’d like to change managing agent to PMS. How do I get the agreement of all the Leaseholders?
Agreement from all Leaseholders is not normally required. Most modern leases have provision for a Residents’ Management Company that all Leaseholders are members of. The members then elect a Board of Directors, usually at the Annual General Meeting each year, who are trusted to make decisions for the benefit of everyone.
On the basis that your lease allows it (some leases state that a managing agent is elected by your Landlord, but these leases are rare now), then the Board of Directors is free to select a managing agent to work with. This is similar to the Board making decisions about the hiring of contractors, which in effect is what a managing agent is.
The only time that a wider consultation with all Leaseholders is needed is if the Board wishes to engage our services for a contractual period of greater than 12 months. If it is a new client’s intention to engage us for longer than 12 months then Section 20 of the Landlord and Tenant Act 1985 becomes operative. This legislation is designed to allow all Leaseholders to be consulted on long-term qualifying agreements, to ensure that everyone is content with the appointment.
Won’t it be a hassle changing over all the payments etc?
Not at all; your service charge money is protected by Client money Rules and Section 42 of the Landlord and Tenant Act 1987; service charge monies must be held in a designated trust account and correctly accounted for.
When we take over management of your block, your outgoing agent is obliged to provide a fully reconciled fund transfer to us. The reconciliation will show all financial transactions for the last six years as well as a snapshot of every Leaseholder’s service charge account which we then transpose onto our own systems. This is managed by us, in-house, with little or no need for a new client to be involved.
There are some pretty severe, potentially criminal, consequences for not properly accounting for Client Money – this is the reason why the switch, in a financial sense, is not convoluted at all.
What are the advantages/benefits of changing to PMS?
We do management ‘right’, not ‘quick’, with a two tiered level of professionalism and regulation that very few Managing Agents can boast of.
In an unregulated industry, anyone who wants to set themselves up as a Managing Agent can do so. You could have many tens of thousands of pounds (and sometimes, even hundreds of thousands of pounds) of service charge money being held by a company or individual that has no prior experience of Landlord and Tenant law, doesn’t know how to hold and operate client money and doesn’t know how to read and interpret a lease.
The Association of Residential Managing Agents (ARMA) introduced a standard, known as ARMA-Q, in 2015, a standard we have been fully accredited to since that time. Our ARMA-Q accreditation ensures that we are experts at holding and processing client money, operate to the highest possible standards and offer the best guidance to our clients in a constantly evolving arena of Health and Safety and Landlord and Tenant law.
We are one of only a handful of Managing Agents in England and Wales that offer this two-tiered level of protection to Clients.
Will I have a long notice period before I can change agent? How long will it take to changeover?
This depends on what is provided for in the management agreement with your current agent. We will provide assistance by studying the agreement that is in place and confirming what notice period is operative. If there is no notice period confirmed in the management agreement, then 28 days’ notice will suffice.
Once we know that the previous agent will be relinquishing management, we can take over and administer the handover process. We can actually have a development up and running in as little as three days, if needed.
What aspects of the changeover will you deal with and what will we need to do?
If a client is interested in making the switch to PMS, all they have to do is to serve notice to the current agent. Once this has been done, and the current agent has acknowledged that their tenure will be coming to an end, we take over from there, keeping our new client updated as to progress along the way.
We can provide a support service when dealing with your outgoing agent – typically this includes providing background advice on how to deal with an incumbent agent and providing letter and email templates to instigate the first steps of making the switch to PMS. Everything else we do for you.
We have familiar contractors for cleaning, window cleaning, gardening, maintenance etc. – will we be able to use the same people?
Absolutely – as long as they are correctly insured and work to current health and safety guidelines.
If a contractor is not performing properly, or not providing value for money in the eyes of a new Client, we have a portfolio of accredited contractors to choose from. Our contractors portfolio contains small, medium and large companies (completely unconnected to us) that have been carefully vetted to ensure that they provide services strictly in accordance with Health and Safety guidelines and are happy to price work based on economies of scale.
Why have a contractor travel a hundred miles to change a lightbulb when we can source someone local to you to do the job for a third of the price?
Will it affect our block insurance premium?
Not necessarily – in actual fact, switching to PMS means you get access to our insurance portfolio giving you greater buying power for insurance related products. You will still benefit from a bespoke policy for your development, but typically we can save money as we source these policies in bulk for our portfolio.
Insurance costs can fall in some cases, but this is not always guaranteed. Your block insurance costs are influenced by claims history, your postcode and how accurate your buildings reinstatement value is (insurance revaluation surveys should be carried out once every three to five years; we can assist with this).
How long do we need to sign up for?
Our first management agreement will be for 12 months. Our management agreement is a hybrid; it includes all the quality assured standards and work practises of ARMA-Q. It is presented on such a way as to make it easy to read, in plain English and not full of legal jargon that you need a degree in law to understand.
What to do next:
Our team are ready to discuss your current situation and help you move your Leasehold management to us – fill out this simple form and we will be in touch very soon.