Our guide to changing your block manager in 202330 December, 2022
The number of disputes with property management businesses (also known as block managers) is rapidly increasing across the country. Terminating a contract with your property manager due to non-compliance with the requirements is now routine – renters are changing property managers more frequently than you think!
Many leaseholders believe they cannot change property managers; nevertheless, they can! Before changing property managers, make sure you understand the terms of the agreement as well as your legal rights. Get your facts straight because terminating a contract is rarely simple, especially if one of the parties feels cheated. If not, you may be in violation of the lease as well as complicating matters.
Block Living has extensive expertise supporting leaseholders, RTMs, and RMCs in shifting management services and lease enfranchisement.
So, how can you switch property managers?
Is there a reason to switch?
Examine the terms to see if they require cause to terminate the contract. Some people do not. If cause is necessary, it will be clearly stated in the contract. You may terminate the contract for any reason if no cause is necessary.
Breach by the block manager
If the managing agent has violated the terms of the contract, it is in your best interest to terminate the arrangement. A breach can endanger your property and its people. This cannot be permitted. Examine the contract to check if the property manager has violated any conditions. Identify the term that has been violated and collect any evidence of the violation to aid in the contract termination request.
The notice period required to end the agreement will be specified in the contract; this can range from 30 to 90 days. If you fail to comply with the notification period, your request to terminate may be ignored or as bad as being in breach yourself. Always pay attention to the notice period and adhere to it for the lowest amount of time.
This should always be done in writing, along with the date the termination will take effect. Never email and always seek postal proof. This ensures that your termination notification is documented in writing. Include the reasons for termination in your notification to terminate.
The agent should confirm the termination in writing, explaining when management will cease. This adds to the paper trail and provides you with documentation proving that the termination was requested and performed. Keep the confirmation as documentation of the process.
Leaseholders who pay a service charge should be notified if the property management is changing. The present property management may also do this. The best thing to do is to notify the leaseholders in writing.
Transfer of funds
At the handover step, the agent must pass over the balance of funds not required to meet previously stated promises, together with a statement of accounting. Unless otherwise agreed, the remainder should be paid within three months.
The documentation that will be handed over is that specified in the management agreement.
Your Three Alternatives for Property Management Change
If you are dissatisfied with your property management business, you have various options. There are three main options to change the management of your property: petitioning a tribunal to appoint a new manager, exercising your Right to Manage, or forming a Residents’ Association.
1. A tribunal to appoint a new manager
It is required to be able to demonstrate poor management in order to select a new manager. For example, you could show that your manager violated an accepted code of management practise. The first step is to serve your landlord with a Section 22 notice, which offers them the opportunity to correct the issues you want addressed. If they fail to do so, you can petition the First-Tier Tribunal for the appointment of a new management.
2. “Right to Manage”
Leaseholders of flats (but not homes) have the Right to Manage (RTM), which permits them to take over property management. They can do this without obtaining authorization from the landlord by forming a right to manage corporation. It is not essential to demonstrate that your landlord is incompetent or has failed to perform their obligations in order to use this privilege. A certain number of leaseholders must participate in order for the company to be formed, and the building must also meet certain requirements. When the company is founded, it sends a notification to the landlord and, if successful, can take over administration of the company.
3. Form a residents association
Finally, you may choose to form a Residents’ Association. This is a collection of leaseholders who all have leases from the same landlord with comparable terms. The group represents the members to the landlord and can help them when dealing with conflicts between residents and landlord. There are two ways to formally recognise the association, which strengthens the group’s position. The secretary of the group can provide the landlord written notice, or the local Rent Assessment Committee can issue a certificate.