How easy/difficult is it to set up a freehold management service?

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    How easy/difficult is it to set up a freehold management service?

    I live in a share of freehold (block of 5 flats) and we are currently paying around 6k per flat for management/bills per annum. No concierge but there's a lift. It's an external management company that we outsource to. Thing is, I feel that they were coming up with rather expensive quotes and so I've personally sorted out all relevant insurances and other bits and bobs for the block. We all get along well and I've lived here the longest. I've managed to save us all many hundreds by going out and looking for better solutions to counter some of the quotes the agents gave provided.

    Part of me is wondering how hard it would be to take over the management - I have a property btl company in any case - and could perhaps bill it to my company; and all of us would still be quids in as the intention is merely to cover cost for my time or if I outsource parts of it. I've put this to the other freeholder and as long as I do it right, they are happy to go along. But I'm wondering if it's worth my while now, to gain that experience or just to forget it.

    #2
    We need some more information please. Are the leases directly between the freeholder and the leaseholders or is there an RMC involved?
    A block of 5 flats can probably be managed by the leaseholders themselves, especially if you are all contributing and you all get along well. The problem is when one of you wishes to charge for your time, you will be regarded as operating a business and you will need to comply with all kinds of legislation and it really is not worthwhile if you are managing one block.

    Comment


      #3
      I think £6K service charge per flat is "over the top" for no concierge onsite service. .

      I think the freehold company can appoint you as a managing agent for the service charge account on a one year trial basis .and you can charge say £250 - £300 per flat or whatever sum is agreeable.

      You need to keep records of the service charge account and separate bank account, billing each flat for annual service charge payment and probably spend about 1 - 2 hours per month doing the management work and signing cheques to pay the bills etc.

      Your block can join the FPRA and you get advice on how to manage the building.

      Comment


        #4
        eagle2,

        The leasehold is between the leaseholders with each flat owning 20%. We have simply engaged the services of a management company. I take your point. That's fair. Besides me, don't think anyone else will want to manage it for now.

        Comment


          #5
          Gordon999,

          Thanks for that. Not sure if I'm up to it but will certainly look into it. That's a good way to go about it though.

          Comment


            #6
            I suggest that you arrange a meeting of leaseholders and try to share the workload of managing the block. If you explain that you are trying to reduce the costs, it should be received well and you should receive a positive response. You should expect it to take longer than 1 or 2 hours a month and considerably more than that in the early stages,

            Comment


              #7
              Sounds lke you only have 2 Directors, is this correct.

              If the block ( 5 flats ) is contracting out the management of the block, And you will be contracting out to a managing Agent , not a company then there must ba a management company with all 5 leaseholdrs having shares in that company, and between 1 and 5 shareholders will be directors.
              You will be known as a R.m.c, ( Resident management company )
              and on the overview at the companies house website for your company, it will state

              Nature of business (SIC)
              98000 - Residents property management

              If so, you already have a Management company, if you have shares - you have shares in the Management company that farmed out the running of the place to an agent.

              Just have a word with the directors, and say, current management company seem to be ripping us off ( May be ligitimate maintenence costs -- but maybe not ) We must sack th current company, and either you two run the company, or find another agent to manage the place.

              You are entitled - by law, to ask to see all the invoices for work done over the years. If the agents refuse, they are breaking the law ater 28 days if they refuse. -- That's your first job --- see if you ARE being ripped off.

              The Directors control the agent, not the other way round, so if agent is ripping you off, - sack them.


              Comment

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