Health & Safety Snow

 

No matter how much you try to explain matters this is still one of the most confusing three words when it comes to property management although it seems to get plenty of mentions this time of year with snow on the ground.

 

Each development and property manager will have their own way with dealing with ice and snow as does each local authority and county. In Essex the mains roads are gritted but the side roads are not that is the Essex County Council's policy. Drivers therefore take care when driving on side roads and treat main roads as they would the rest of the year.

 

Our advice with regards to gritting pathways and car parks is to leave well alone, not because we want our residents tripping up and getting their cars stuck in the car park but because there is less chance of an accident if you leave it on the ground.

 

Why?

 

Residents know it's there and therefore take care when walking on pathway, stepping off of entrance steps and manoeuvring their vehicle in and out of the car park.

 

If you were to grit the areas you would have to make sure that you never missed an area as residents would treat the pathways, steps and car park as they usually would and therefore any missed icy area and they slip.

 

The management company would then be deemed to not have cleared the snow properly and could face potential damages claims and the fact that the rest of the development was ice and snow free is irrelevant.

 

With any aspect of Health and Safety you have to look outside the box and at the bigger picture.

Are you just engaging the services of a managing agent?

I had to buy a new TV last weekend, so off I went to one of the leading electrical wholesalers after deciding on the internet which one I wanted. I arrived, went straight over to a salesperson and told him I would like one of those please.

 

Went to the check out, waited for him to get back from the warehouse then just wanted to pay for and get it back home and set it all up. Not too much to ask is it? Instead I was being asked whether I wanted the latest new HDMI socket or their piece of mind insurance policy.

 

OK I guess they have to ask but between entering my address details for TV licensing purposes and handing over my debit card the salesperson asked a further two more times to the point where I nearly said stuff the TV and walked out.

 

I guess they are only following orders and trying to increase the company's income but it did make me wonder if this is one of the reasons many shops are closing down and people prefer to order online?

 

It also got me thinking about the business of managing agents and how for some residents engaging the services of a managing agent could also lead to other associated companies coming on board at least with the electrical wholesaler the salesperson did give you the option but for leaseholders before they know they are being insured by the managing agent's broker and having the cleaning and gardening done by an associated contractor.

 

It might not even end there all the services provided to their development or resident company could be being carried out by contractors or organisations who through some means pay the managing agent and make no mistake it is you who will end up paying for it with increased costs.

 

Managing agents are getting more and more crafty in finding ways of earning extra revenue and not declaring it to residents and even seem to stick to industry regulations.

 

I heard only the other week of one managing agent who are making a charge to contractors and service providers for appearing on their website but what they were in fact doing was charging a fixed fee for allowing a contractor to work on a site they manage, the more sites they worked on the higher the fee but it looks to get over the anti-bribery laws  they make a charge for them to have their logo on their website on the contractor section.

 

Feel rather guilty now for giving that poor salesperson such a hard time.

Insurance Excess - who pays it?

This has been the subject of debate for many years, who should be responsible for paying the excess when making a claim against a block insurance policy?

With many of today’s managing agents having been challenged about insurance commissions received now opting out of dealing with insurance claims altogether this is a question that seems to get raised more and more.

If an insured damage is suffered to the communal parts of the development the answer is simple the management company will pay it.

What happens though if your property suffers water damage from the flat above?

The terms of the policy will no doubt read along the lines of the policy holder or claimant will be responsible for the excess which will automatically be deducted by the insurer upon settlement of the claim.

As most block policies are in the name of the management company then that would make them the policy holder and therefore they will be responsible for the excess?

In most cases the claim form will be completed by the managing agent on behalf of the management company they represent, so again in this instance the claimant and the policy holder are the management company and therefore responsible for the excess.

 

If your managing agent no longer deals with claim handling then it is up to the owner of the property that has suffered water damage to make the claim and then they will be responsible for the excess and recovering those costs from the flat above.

Depending of course on the cause of the water damage from the flat above is it fair for them to have to pay the excess?

If they were negligent or refused to deal with an escape of water despite being advised then yes by rights they should pay the excess however what if the residents of the flat that suffered the water damage went away for a few days and the water leak went un-noticed should the flat above then be responsible?

Another way at looking at it is if both flats had separate insurance then the insurance company dealing with the water damage claim would look for reimbursement of all costs including the excess from the insurer of the flat that was the source of the water leak.

With a block policy all properties are insured as a whole and by one insurance company therefore the insurance company would look to reimburse costs from themselves with the exception of the excess which would be payable by the policy holder.

Therefore and what we advise our clients is unless the cause of the water damage is due to a person’s negligence the excess is paid by the management company through the service charge funds. Needless to say the final decision rests with the client!

It is therefore equally important when arranging block insurance cover to ensure you do not sacrifice a lower premium in favour of too high an excess charge as you can never guarantee the amount of claims that will be made and that could lead to a serious budget deficit.

Dispatches- property nightmare

If you missed last night's dispatches you can catch it again here:

http://www.channel4.com/programmes/dispatches/4od/player/3399948

Other media soon jumps on the leasehold bandwagon:

http://www.guardian.co.uk/money/2012/aug/20/leasehold-property-laws-sweeping-reform-thinktank

So is Grant Schapps MP the housing minister wrong not to immediately look at regulating the industry and who to regulate - Freeholders, managing agents or the directors of resident management companies?

I can see why the current and previous Governments have left it alone just too many scenarios to have to deal with!

How to choose a managing agent.

20 years ago you would be forgiven for not knowing what a managing agent did or what the term block management even meant. Back then there were just a few managing agents, developers weren’t building as many leasehold properties as they are in most towns and cities today. Therefore the number of managing agents has also increased, some solely deal with block management others will also incorporate property lettings and sales into their business.

Although the industry is unregulated managing agents still have to abide with relevant laws and regulations and the good ones will be registered with the ombudsman service and probably will be members of an industry trade body ARMA, ARHM, LKP etc.

So how do you know go about either finding a new managing agent or ensuring that you are receiving not just value for money but also getting the service you and your building deserve?

Below are some points that residents should ask of any prospective or their current managing agent, our answers are found below the question in italics:

Experience: 

·         Are they registered with the ombudsman service?

Block Managers are registered with the Ombudsman Service

·         Are they registered with the ICO

As we handle resident information we are registered with the ICO

·         Are they a member of an industry trade body?

We are an accredited agent of the LKP who have their own internal complaints procedure

·         How many years’ experience in the industry do they have?

We have worked in the block management industry for 20 years

 

·         Are they managing any other developments like yours?

We currently are managing a variety of developments ranging from mixed tenure developments to purpose built apartment blocks.

·         Have they been brought before the LVT?

We have never been brought before the LVT and ensure that a thorough explanation is given to residents on any service charge cost.

Managing Agents costs:

·         Do they charge a percentage or per unit fee?

Our fee is based on what is more beneficial to the development and will either be based on a percentage of the total service charge demanded or a per property per year cost.

·         If a per unit fee, how much per unit per year?

Fees are based purely on the size of the development and range form £100-£140 per leasehold property.

 

·         Apart from the management fee will they make any other additional charges for managing your development?

The only time any additional charge will be made will be for extra postage monthly newsletter etc. or if residents decide on a one off project outside of the normal service charge budget where a one off payment will be made.

Hidden costs:

 

·         Do they earn commission for arranging buildings insurance?

NO – this can only increase resident’s service charge costs

 

·         Do they charge contractors any form of fee for awarding them work?

NO – this can only increase resident’s service charge costs

 

·         Do they have any association with contractors or an insurance provider?

NO – this can only increase resident’s service charge costs

 

·         Do they use client accounts?

No all managed development have their own designated bank accounts and also currently enjoy 2 years free banking.

·         Do they earn a fee from any energy supplier?

NO – this can only increase resident’s service charge costs

Terms and Conditions/Regulations:

·         How long is the notice period should you wish to terminate their services?

Our management agreement stipulates that we are employed on a month to month basis

 

·         Will they charge either a takeover or handover fee?

We do not charge wither a takeover or handover fee

 

·         Do they abide by the RICS service charge code?

We abide strictly with the RICS service charge code as well as all other known industry regulations

 

·         What measures do they have in place for Health & Safety?

All management of Health & Safety is included within our management fee, we are both competent and NEBOSH qualified to manage this on the resident’s behalf.

Too much like hard work to change managing agents

The thought about having to go through the process of replacing your current managing agent can be daunting at the best of times and it is often the case residents will stick to the the devil they know even if it means they are forever checking up on them.

Any relationship personal or business has to have an element of trust and when that is gone can any relationship continue and flourish?

In most cases 3 months notice has to be given to terminate a managing agents service, during this time it is safe to say that the agent will do the bare minimum when it comes to looking after your development and the new managing agents will no doubt have to pick up the pieces which is why some agents charge a takeover fee, add this together with any handover fee your old agent will charge and you can be looking at the best part of nearly £1000 form your service charge fund to change from one to another.

Not much can be done when it comes to your old agent charging a handover fee unless of course it was not formally agreed in their management agreement but we can assist any development when it comes to appointing us as your new managing agent by not charging a takeover fee no matter how far into your financial year you are.

We will even assist you during the 3 month termination period to the extent that we will manage your development free of charge during that period as it would assist us both in a smooth handover and also give us the opportunity to really get to know your development.

Having no association or preferred contractor scheme we will happily work with your current contractors if you so wish and even obtain competitive building insurance quotes should your renewal fall within that termination period. 

So if you feel that you are not receiving the service you and your building deserve call us today!

From the frying pan into the fire!

I have previously mentioned managing agents who get appointed by a developer on a previous post but it still amazes me why developers do not wise up to such agents and their ‘fill their boots’ business mentality.

I was recently contacted by a resident of a new build local, mixed tenure development who kindly sent me a copy of their current budget not surprisingly most of the regular maintenance was being carried out by associated contractors, the insurance premium was exaggerated and for the last two years they had in the budget costs for a playground that hadn’t even been built!

Just when you think you’ve seen it all I stumbled on a new tactic to confuse the residents even further there was a separate budget item for VAT, instead of VAT being added against each cost it was all grouped together. Where VAT is charged by a contractor our budgeted costs will include the VAT that way it is simple to see that for instance gardening costs so much and the cost includes VAT if of course the current gardening contractor is VAT registered.

Anyway I reviewed the budget and advised the resident of immediate cost savings without even reviewing the costs of gardeners, cleaners etc. and instantly could reduce their annual service charge by over £18,000.

It would have been all too easy to shave a few thousand pounds off of other costs but that is not our policy and I always advise that three alternative quotes should be obtained depending on the specifications. I know other agents will contact a preferred or associated contractor for a comparative cost but that does not ensure residents will truly receive value for money only that agent will benefit from another development to manage and one of their preferred contractors with more regular work.

So to any resident looking to find another managing agent be careful you are not jumping from the frying pan into the fire always and make sure you get comparative quotes from other managing agents and find out about the services they offer and of course how transparent they really are.

Developers please also take note it may seem easier to use the services of a national agent but what is that doing for your after sales reputation?