So each year you pay a substantial amount of money to your managing agents in London.
You get a budget with lots of categories you never scrutinise.
You then get a set of accounts saying what the property manager has spent your money on after the year is over.
We can’t think of many service industries that consumers would pay a substantial amount and receive so little……and be happy about it.
Of course you do have rights as a leaseholder (we explain all those here) but on a very basic level, what should Resident Management Companies be receiving each year?
What are the Directors of Resident Management Companies (RMC) responsible for?
Fundamentally, the Directors of your RMC are must act in a way that promotes the success of the company to which they are a Director.
They have a responsibility to make decisions that are in the best interest of the company members (the leaseholders typically) and naturally have to justify their reasoning. What this all means in laymans terms is that the Directors must make the best decisions possible for the building, running the RMC like any other limited company in the UK.
So how can Directors ensure they are making the right decisions?
According to the University of Massachusetts there are 7 steps in effective decision making and they created this handy image below to show them:
As you can see, apart from the obvious steps such as identifying the problem and taking action, a lot of emphasis is put on having the right evidence and being able to weigh up the information prior to making the best decision.
This brings us nicely back to the Directors role, if you aren’t getting the information / data you need, this means you are skipping steps in a typical decision making process and therefore how can you and your leaseholders have peace of mind that the decisions you make are in the best interest of the company as is your responsibility?
With that being said, let’s take a look at what you should expect from your Managing Agents.
Your Managing Agents Financial Update
Most Directors of RMC’s meet on a quarterly basis giving the perfect opportunity to review a number of factors, including the financial health of the building.
Below are the financial reports you must receive:
- Budget vs spend to date
This is an ongoing report highlighting what was budgeted for at the beginning of the year and what has been spent in that category up to a specific date. Ideally the amount spent to date should tally up with the amount to be spent for the rest of the year i.e. at the end of March, you should have spent ¼ of the total budgeted amount.
- Service Charge Arrears
This is probably the most important report. Service Charges are the lifeblood of the management service. It is therefore obvious to realise that if leaseholders are not paying their service charges, repairs cannot be carried out, contracts will need to be paused and regulatory concerns cannot be met.
- Cashbook report
It is important to find out the ‘cash in cash out’ status of the building but more importantly, the devil is in the detail as always. A periodic cashbook is essential to Directors. A line by line analysis of exactly where money is being spent can allow Directors to make better financial decisions for the building over the financial year.
- Bank Balances
A simple summary which compliments the other financial reports above. With buildings potentially having multiple bank accounts for service charges, reserve funds, sinking funds, an overall view of the balances can be a useful insight.
Your Managing Agents Maintenance Update
With the financial information being of upmost importance, it is essential to review this first.
After that has been completed, your Managing Agents now need to provide an update on maintenance and strategy, both completed to date and for the rest of the year.
“A successful block management company not only ensures the cleaning is completed and the lightbulbs are replaced but there is an element of capital expenditure project management that needs to cover the current and future years”
Managing Agents do this is many different ways so its best to simply tell you how Strangford Management complete this requirement.
Upon commencement of our management service we hold meetings with every leaseholder. This enables us to get each and every gripe straight from the leaseholders. All of these issues are then broken down into a simple spreadsheet that details:
- what the issue is
- a timeframe to resolve the issue
- quotes received for the issue
- importance rating
This simple report can be used not only to ensure Strangford Management are providing the most efficient service but also it is a useful communication piece for all leaseholders to allow them to individually financially plan. Only poor Managing Agents would wait until a project is due to request large sums of money for it.
How Property Management Software can help you
These days we have mobile app stock trading, on-demand TV, internet shopping (you can see where we are going with that). Modern needs require not only a personal service but also an on-demand, internet based software support system.
We go into detail about what you get from our client portal here.
Whilst the Directors of your RMC can be provided information regarding the overall management of the building, our property management software can provide you with individual financial information, maintenance updates and general documentation in regards to your home.
With an on-demand support system such as ours, complementing the experienced professional staff managing your building, you will receive the most proactive property management service from a London managing agent.