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?

Guest contributer article

I was recently very proud to be asked to be a guest contributer for the independant website Leasehold Life (www.leaseholdlife.info)

They wanted to know why I chose to be come an accredited managing agent of the Leashold Knowledge Partnership?

My reply and article read:

There is a lot of confusion in the leasehold sector and I can honestly see why it remains unregulated. A managing agent can be employed by a freeholder, developer or by the residents and both guidelines and current regulations try to cover all three scenarios.

The previous company I was with were members of ARMA but basically chose which guidelines to follow and when it came to guidelines with regards to being transparent they chose to ignore them. They did not declare any commissions received and collected service charges monies in one large client account. Needless to say they are by no means alone and there are plenty of ARMA members who do the same and have been repeatedly brought before the LVT. As in any civilised society if you break the rules you should pay the consequences but none of these companies received any disciplinary action from ARMA, which begs the question what do they stand for?

I stumbled across the Leasehold Knowledge Partnership through the CarlEX website and what I read about them made sense. They appear not just to be an ARMA alternative but an actual force to be reckoned with when it came to protecting leaseholders. This was exactly what I wanted. My customers would know that being an accredited member meant that they had more than just my word that my business would at all times be honest and transparent because if I weren’t then here was an organisation that would actually do something about it!

I therefore made contact with Melissa Briggs, one of the founders, and it was quite clear from talking to her that the Leasehold Knowledge Partnership’s intentions were more than just words. Alongside other board members they are certainly on a mission to not just purge the industry of unscrupulous landlords and managing agents but to genuinely offer some meaningful protection to leaseholders. I therefore decided to apply for and received accreditation status in January 2012. It will not take much effort on my part to abide by their rules and regulations as we already share the same principles and I had already adopted a policy of transparency.

Hopefully the Leasehold Knowledge Partnership will continue to grow with more and more managing agents and developers signing up and I offer Melissa and the rest of the board my full support and wish them the greatest of success.