How To Change Property Management Company15 November 2022
The number of disputes across the country with property management companies (also known as block managers) is rising fast. Ending a contract with your property manager due to the terms not being fulfilled is now a common occurrence – tenants are changing property managers more frequently than you think!
Not many leaseholders think they are able to change property managers, well they can! Before you change property manager you should ensure you understand the terms of the agreement and your legal rights. Get your facts right as ending a contract is very rarely straight forward, especially if one of the parties feels aggrieved by the action. If not, you may be breaching the lease too or could make the situation very tricky.
LevelUP are experienced in assisting leaseholders, Right to Manage and RMC’s in changing management services and lease enfranchisement.
So how can you change property managers? Our quick video on ‘How to Change Block Manager’ provides you with a step by step guide, or if you’d rather read the steps below.
Is there a cause to terminate?
Read the terms and check if they require cause in order to terminate the contract. Some do not. If cause is required, this will be described in the contract clearly. If no cause is required, you can terminate the contract for any reason.
Property manager breach
It would be in your best interest to terminate the contract if the managing agent has breached the terms of the contract. A breach can lead to putting your property and residents at risk. This should not be tolerated. Check over the contract to see whether the property manager has breached any terms. Identify the term that has been breached and gather any evidence of the breach to help with the request to terminate the contract.
The contract will specify the notice period required to terminate the agreement; this can range from 30 – 90 days. If you do not abide by the notice period, your request to terminate may result in being ignored or as serious as being in breach yourself. Always be sure to pay attention to the notice period and follow it to the minimum length of time.
Providing notice to terminate
This should always be completed in writing with the date of which the termination will take effect. Do not email and always obtain proof of postage. This will ensure there is a written record of your notice to terminate. Include in your notice to terminate the reasons for terminating.
The agent should confirm the termination in writing stating the date at which management ceases. This continues the paper trail, and gives you a document that proves that the termination has been requested and completed. Be sure to keep the confirmation as evidence of the process.
The leaseholders who pay a service charge should be notified that there is to be a change in the property manager. The current property manager may also do this. Notifying the leaseholders in writing is the best thing to do.
Handover of funds
At the stage of handover, the agent must hand over the balance of funds not required to meet commitments already made, with the balance being handed over with a statement of accounts. The balance should be passed within three months unless otherwise agreed.
The documentation that will be received at handover is that as stated in the management agreement.
Your Three Property Management Change Options
If you are unhappy with your property management company, you have several options to help you change. There are three primary ways to get your property management changed: asking as tribunal to appoint a new manager, using your Right to Manage, or setting up a Residents’ Association.
- Appoint a new manager through a tribunal
To appoint a new manager, it’s necessary to be able to prove bad management. For example, you might demonstrate that your manager hasn’t complied with an approved code of management practice. The first step is to send your landlord a Section 22 notice, which gives them the opportunity to fix the problems that you want to be addressed. If they fail to do this, you can apply to the First-Tier Tribunal to ask for a new manager to be appointed.
- Exercise your Right to Manage
Leaseholders of flats (although not houses) have a Right to Manage (RTM), which allows them to take over the management of their property. They can do this without the landlord’s permission by setting up a right to manage company. To exercise this right, it is not necessary to show your landlord is incompetent or hasn’t fulfilled their duties. A minimum number of leaseholders needs to take part to set up the company, and the building also needs to meet a few conditions. When the company has been established, it sends a notice to the landlord and can take over management of the company if successful.
- Create a Residents’ Association
Finally, you have the option of forming a Residents’ Association. This is a group of leaseholders who hold leases from the same landlord and with similar terms. The group represents the members to the landlord and can put them in a better position when dealing with issues between the residents and landlord. There are two ways to have the association formally recognised, which improves the group’s position. The secretary of the association can give a written notice to the landlord, or a certificate can be issued by the local Rent Assessment Committee.
LevelUP are experienced in assisting leaseholders, Right to Manage and Residents Management Companies in changing property managers. We’re on a mission to change the way property management is carried out, delivering a transparent and open experience. The residents we look after can contact us at any time and even through social media. We want to build happy communities so if you’re looking for a property management company that cares, read more about our residential property management services here.
LevelUP are experienced in assisting leaseholders, Right to Manage and Residents Management Companies in changing management services. Please feel free to contact us for further information at email@example.com