Date Published 19 June 2018
1. Prepare the request for information (the ‘brief')
Take time at the outset of the process to discuss and set down exactly what you want from the new managing agent. This important work begins with a clear understanding of your development: consider what's important to your site; the make-up of the leaseholders and residents, and the sort of relationship you want with a managing agent. As part of the brief you should set out the services you require. These are likely to include: financial (service charge accounting, collection and recovery); leaseholder relations (including attending meetings, communications); repair and maintenance; legal representation; landlord and tenant advice; and providing support to the board. Some managing agents will offer a pick and mix type approach if you don't want to outsource it all. If you're not sure what to include, this helpful guide from ARMA (the Association of Residential Managing Agents) sets out examples of the services you might want the managing agent to provide.
Cost is of course an important consideration, so ask each agent to set out their fee structure and approach to commissions from services such as insurance. You will want financial transparency from your managing agent but you must also be honest with them. Set out clearly any problems that they might be inheriting and ask them how they would resolve them. This will also give you a chance to understand both their knowledge and their customer service.
2. Draw up a long list of potential managing agents
This research element is arguably the hardest part – how do you go about finding ‘good' managing agents? As with many things, the best advice is to seek personal recommendations. Ask other residents in the block; particularly newer ones who may have had good experiences elsewhere for their recommendations. Take a quick tour of similar developments in your locality; talk to residents of well-managed developments and find out who they use. And, of course, there is good old Google. Search terms such as ‘property management', ‘building management', and ‘residential managing agent' can all help. You can also find directories on website such as Flat Living. Aim for a maximum of six managing agents to whom you'll send your brief, with a view to shortlisting two or three.
3. Send the brief to the long list of managing agents
Send the brief to all managing agents and give them a timeline to respond. Three weeks should be sufficient.
4. Assess and shortlist
After three weeks, you should have a pile of submissions from the agents interested in managing your developments. Your aim now is to reduce this down to a shortlist of no more than three – and this can lead to interesting conversations when directors have different views and opinions! You can help take the heat out of the discussions and make it more objective by creating a scoring matrix against the questions in the brief. Aim to get back to each of the agents within a fortnight; be prepared to give feedback to any unsuccessful agents. Invite each successful managing agent to a meeting with the RMC directors. At this stage we would also recommend you seek references from their existing customers.
5. Meet your shortlisted agents
This is the fun part – sitting down face to face with each of the shortlisted managing agents. Ensure you will be meeting with the people who will be managing your block and dealing with you on a day-to-day basis. For each meeting, work through a list of pre-prepared questions and, as with the stage before, aim to ‘score' each agent to help with your decisions. As well as clarifying any areas in their proposals, you will want to understand their approach to customer service and their values - for example, at Clear, we operate on the values of Quality, Value and Transparency.
Talk through their approach to choosing and using contractors; do they have a contractors charter in place? Ask to see examples of their service charge demands and accounts. Can you understand them? Are they clear? Find out about their communication channels. Do they offer a portal? What are their service standards for answering calls and emails, dealing with complaints etc?
6. Speak to their customers
Ask the shortlisted agents for contact details of residents at two or three developments similar to yours. References are useful, but speaking directly to a managing agent's existing customers will help to give you the 'real picture'.
7. Make the decision!
Sit down with your fellow directors, review their proposals, their references and talk through the experience of meeting with them. At the end of the day it really is a people thing: who would you trust to look after your development as if it were their own home?
8. Contract with your chosen agent
You can talk to your solicitor for this or use one of the free template management agreements offered by ARMA, RICS, or ARHM. We recommend building in an ‘easy exit' clause after year one if the relationship is not working out.