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?