I have bought a share-of-freehold flat and residents are considering having a professional block manager. Is this something you’d suggest?
Running a building professionally is important, and it’s not as straightforward as it might seem.
The building must meet health and safety regulations and that is a lot of responsibility.
Regulations change so you need to make sure you are up to date and any requirements are implemented properly and on time, such as carrying out fire risk assessments regularly.
You also need to make sure that the building is properly run financially. Service charges can be demanded from owners in line with the lease terms and landlord and tenant law.
Ensuring that you collect sufficient service charge contributions is essential.
Buildings can be unpredictable in terms of cash flow required to maintain them, so it’s always a good idea to have funds on account if possible. This requires disciplined payments from residents and an effective arrears policy if they don’t pay.
You should hold funds in a client deposit account, and you need to trust who is going to manage this.
There will also be accounting responsibilities, such as filing company accounts and all leaseholders must be provided with details of expenditure.
It is a good idea to prepare an expenditure budget and ensure you have funds to pay for it. Some residents have a nasty surprise when they have to inject an unexpected sum of money for unplanned works.
Some residents manage their buildings very effectively, but others require assistance, often when the building relied on a resident running it, but they’ve since moved out, or don’t want to do it any more. There is a cost for enlisting a professional block management company but, in my experience, when we have been appointed to take over management of a building, there is often a big sense of relief from the residents handing over the responsibility.
Plus, it’s often better for neighbourly relations having an independent professional company ensuring that everyone is fulfilling their obligations, rather than you having to police your neighbours yourself.