A service charge is a fee that is charged by the building management committee (often through a Property Management Company) that contributes towards the upkeep of your block/estate.  Your service charge fee is usually spent on:

• Planned maintenance (e.g. testing fire alarms, emergency lights and boilers). For posher buildings this could also include maintaining the swimming pool and/or gym equipment
• Reactive maintenance (e.g. repairing the boiler when it breaks down)
• Utilities for common areas (gas, electricity, water)
• Buildings insurance
• Property Management Company fees
• Sink fund (pot of money held in reserve for major works or emergencies)

The service charge can vary greatly depending on the type of property being managed (private estates are generally a lower cost than blocks of flats), and the standards and facilities being provided.  For example a swanky block of apartments in Chelsea with a swimming pool, gym and private cinema will likely demand a higher service charge than an ex-council block in Solihull, because the expectations of the leaseholders might be higher, and because there are more communal facilities that require maintaining.

Therefore service charge fees can range from a few hundred to tens of thousands of pounds a year.  This should be made clear to the prospective buyer of a property in the seller pack, as it needs to be taken into consideration when making an offer on the flat/house in question.

As a rough guide, a leaseholder in a middling apartment block in Birmingham can expect to pay around £1,500 to £2,000 a year in service charge fees.

The service charge period is generally calculated annually, albeit leaseholders are likely to be billed on a quarterly or 6-monthly basis.  You will receive a bill each period from your Property Management Company that breaks down what the service charge fee comprises for that interval.

Sometimes, when major work is required and there isn’t enough money in the service charge fund to cover it, a Section 20 notice is issued to leaseholders, where additional fees are demanded to cover the cost of these works.  These are ad hoc and can be issued at any time, and as frequently as is required depending on the number of major works being undertaken.

Service charges can be apportioned in one of two ways:

• Each leaseholder pays the same amount regardless of size or location of their property (e.g. ground floor v penthouse)

Or

• Each leaseholder pays an amount proportional to the size of their property (e.g. a studio apartment will pay less than a 2 bed penthouse suite, due to it’s smaller floor space).

Depending on the relative size of property you own, and the terms in your lease, you are likely to be either happy or aggrieved with your specific arrangement.

This question could of course apply to anyone not living on the top floor; the answer is that whilst your specific flat might not be adjacent to the roof, it does benefit from the roof being there.  Consider your building with no roof on it at all, it would not take long before rain water quickly cascaded through the ceilings of each story in the block.

The same applies to drainage issues, which are generally found under the ground floor.  All leaseholders contribute towards their upkeep and repair, as all benefit from their correct functioning.

We occasionally receive enquires from residents asking for a reduction in their service charge fee given that they don’t use the gym/pool/laundry room in their block.  If they are not using it, why should they have to pay for it?

Unfortunately one’s use of shared amenities has no impact on your obligation to pay for their upkeep.  Not only would the administrative headache of allocating access to only the fee-paying residents be a nightmare, it also sets a dangerous precedent.

Consider the following scenario: Mrs Smith lives on the ground floor of her apartment block.  She sees that Mr Jones has received a reduction in his service charge because he doesn’t use the on site gym.  Mrs Smith concludes that as a ground floor resident, she has no need to ever use the lift, or to set foot on the higher level floors in her block.  Mrs Smith asks for a service charge reduction to exclude the cost of lift maintenance from her fees, and a reduction against the cleaning budget as she gains no direct benefit from the upper floors being cleaned.

Common sense needs to apply here.  As in life, some people will benefit slightly more from the communal resources than others, but all benefit more than if everything was carved up into individual packages (and the associated time and cost involved in managing this).

There is one exception here.  If the majority of leaseholders (or the RMC acting on their behalf) decides that a shared amenity is too expensive to run for the value that it provides, it can be agreed to close the facility to all residents, thus saving the associated upkeep costs.  As an example, on one of the blocks that Vixus manages, the RMC elected to only run the fountain in the main courtyard for 4 hours a day, as the energy costs of it running longer were prohibitive. 

This refers to Section 20 of the Landlord and Tenant Act 1985.

A Section 20 notice is issued when a repair or improvement is required on the building or estate, and the estimated value of the work is likely to cost over £250 per leaseholder.  These are sometimes referred to as ‘Qualifying Works’.

It is a legal requirement for the landlord (usually via the PMC) to inform leaseholders of such impending works, and a formal procedure must be followed to allow a period of consultation prior to the works commencing.  The consultation procedure follows three stages:

• Stage 1: Notice of Intention
  • This Notice should describe the proposed works and invite all leaseholders to make written observations. Leaseholders can also provide the details of appropriate contractors who could be approached to undertake these works.
  • The expiry date for this is 30 days from the date of Notice
• Stage 2: Notice of Estimates
  • This notice provides details of the estimates or quotes received from the contractors that have been approached to undertake the works
  • The landlord/PMC must provide at lease 2 genuine estimates, with at least one of these coming from a source that is in no way connected to the landlord/PMC.
  • As with stage 1, leaseholders have 30 days to make written observations
• Stage 3: Notice of Contract Award
  • A Notice of Award is only legally required if the selected contractor did not provide the lowest priced estimate. Regardless, it is seen as good practice for the PMC to issue a Notice of Award to keep leaseholders informed of the situation
  • If a Notice of Award (also known as a Notice of Reasons) is provided due to the PMC not selecting the lowest priced contractor, this must be done so within 21 days of entering into the contract

If this procedure has not been properly followed, the landlord/PMC will only be entitled to claim a maximum of £250 per leaseholder for the works.

Due to the relatively low cost of ground rent (particularly when compared to your service charge), ground rents are usually billed annually.  Ground rents outside London should rarely cost more than £250 per unit per year.

In theory yes you can.  The decision regarding whether to self-manage or appoint a Property Management Company depends on your specific circumstances; below we have set out some of the most important considerations:

1. Size of your building/block
   • Self-managed properties often work best when the building contains a small number of units, generally no more than 6 or 8. Beyond that it is very difficult to achieve consensus and the required level of input from the relevant stakeholders

2. Complexity of your building
   • Larger buildings generally have more complex systems and equipment, as well as more stringent regulations in place. A good Property Management Company will guide you through all of these complexities.  On the other hand, if your building is small with fairly standard plant and equipment, self-management might be a more cost effective option for you

3. Knowledge
   • Property management is not rocket science. But us who do this for a living are not complete idiots either.  We are connected to the right bodies to keep us informed of changes to legislation, best practice and innovations that improve the overall operation of the blocks and estates that we manage. 
   • Good Property Management Companies also have a large network of supplier contacts, so that when your basement floods at 2 in the morning, the right tradesperson is sent out to make safe within minutes.
   • If you have this level of insight and a black book of trusted maintenance suppliers, read on…

4. Time
   • So you might live in a small block, with no complicated boiler systems, and you know a thing or two about property legislation. You might be thinking ‘we can save a few quid by managing this building ourselves, rather than getting a third party company in to charge us for doing the same thing’. 
   • You might be right. But what value do you place on your own time?  Being a board member of a Resident Management Committee (RMC) is a time consuming a thankless task in itself; consider how much more time and effort is required to deal with the day to day running of the building?  Hint- it’s a lot!

If you’re still undecided, feel free to take a look at the Vixus Pricing tab to get an idea of how much you would be paying if you appointed a Property Management Company to manage your building/estate on your behalf. 

A Resident Management Company (RMC) is a company that is set up to manage the communal areas of your building.  The RMC is usually made up of leaseholders (people who own the individual properties) who become shareholders of the RMC.  All leaseholders should be afforded the opportunity to apply to sit on the board of the RMC, through an application process where the other building leaseholders can vote to approve or reject the application. These positions are almost always voluntary roles.

The RMC is responsible for managing the service charge on behalf of all leaseholders.  This involves ensuring that best value is obtained on all planned and ad hoc spend, as well as enforcing safeguarding measures to keep the building compliant (e.g. arranging buildings insurance).  Often the RMC will appoint a Property Management Company to take responsibility for the day to day running of the building.  They will charge a fee for this service (that gets included in the service charge).

When a leaseholder sells their property, their shares in the RMC automatically transfer to the new owner.

If your building does not have a Resident Management Company in situ, or if enough leaseholders are of the opinion that the RMC is not carrying out their duties to a satisfactory level, a Right to Manage (RTM) process can be pursued.  Similar to an RMC, the RTM must form a Limited Company, however leaseholders become company members rather than shareholders. 

RTM’s are generally regarded as a more combative approach compared to an RMC, as it usually follows a dispute with the freeholder.  The RTM will provide leaseholders with greater control (and no compensation payable to the freeholder), however the setting up of an RTM can be complex and fraught with pitfalls.  If you are considering the RTM route, Vixus can provide you with some suggestions for legal firms that can support you through the process- just contact us and we’d be happy to do this at no cost.

Property Management Companies (PMCs) charge a fee (usually monthly) to take care of your building.  This includes but is not limited to:

• Collection of service charge payments from leaseholders
• Chasing debts from leaseholders who have unlawfully refused to pay their service charge
• Organising maintenance works, usually by appointing specialist contractors although some PMCs have their own maintenance division
• Arranging buildings insurance
• Resident and leaseholder communication (listening to queries and concerns about the building, and acting on these)
• Building compliance (ensuring that the correct signage etc. is installed throughout the building
• Upkeep of the internal and external areas (by arranging regular cleaning and grounds maintenance, as well as ad hoc services like snow clearance and the removal of fly-tipping)
• Issuing of Section 20 notices for works expected to cost more than £250 per leaseholder

In effect, the PMC operates to save the RMC/RTM the time and hassle of managing the building on a day to day basis.  The PMC reports to the resident board on a regular basis and their contract can be terminated at the end of the year at the board’s discretion.

By law, residential property management contracts cannot be longer than 1 year.  These can be extended each year at the Resident Management Committee’s discretion if the PMC is doing a good job.

Commercial properties are not subject to the same regulations and generally have a longer contract term (3-5 years is standard).

Whilst most Property Management Companies (PMCs) are reputable and trustworthy, unfortunately there are a few bad apples in the industry.  Here’s a few things to watch out for when selecting a PMC.

1. High fees for additional/ad hoc services, such as surveys, contractor call out fees and Section 20 notices
   Some naughty PMCs charge an unreasonably low fixed management fee, and then try to squeeze profit from the ad hoc services that you are forced to use. This is unfortunately an all too common tactic in our industry, and has caught out many leaseholders and Resident Management Committees in the past. 

2. The PMC is unable to introduce you to your Property Manager prior to signing the contract
   The Property Manager is the most important person in ensuring that your building is managed properly. A good relationship between the Resident Management Committee, leaseholders and Property Manager is crucial.  Why might the PMC be unwilling to introduce you to them before contract signing? There might be a valid reason, or perhaps it’s because the PMC knows that the Property Manager wouldn’t stand up to basic scrutiny (for example are they a good communicator, do they have an appropriate level of experience, are they qualified?).

3. Management fees seem too good to be true
   • You know the saying – ‘if something seems too good to be true, it probably is’. This applies to the Property Management sector too.  If the proposed management fee seems much lower than you were expecting, consider the following:
   • Which services is the PMC not providing in their fixed fee?
   • Where might they be hiding costs?
   • How often will the Property Manager visit your block?
   • If you want to check if your quote is too low (or too high), see the Vixus Pricing tab on our website for a comparison, or contact us and a member of the team would be happy to provide some free advice
4. The PMC is not ARMA/IRPM/RICS accredited
   • This is a tricky one, as there are many good PMCs that are not accredited to these industry bodies. As a rule of thumb, if the PMC is accredited then they are almost always a reputable company.  However, make sure you verify their accreditation on the trade body website, as some unscrupulous firms have been known to add the logos to their website without being accredited.
   • Companies that are not accredited are also usually reputable, so lack of accreditation should not be a deal breaker. Rather it should be considered in the wider context, when you are considering the other points mentioned in this article.  For example if the PMC is not accredited, and their management fees seem a bit low, the evidence that you should avoid them starts to mount up.

Whilst the majority of PMCs deliver a good service, there are occasions where you may feel that they are not addressing your concerns.  If you wish to make a complaint about your property management company we recommend the following steps:

• Step 1: Raise your issue with the PMC
  • Some residents seek the involvement of third parties to resolve an issue, before they have even raised the matter directly with the PMC. It is good practice to afford the PMC a chance to respond and hopefully resolve your issue before a formal complaint is raised
• Step 2: Discuss with other leaseholders
  • Is this a problem that affects multiple units in the same block/estate? Better to band together and communicate as a single voice, rather than everyone inputting separately
• Step 3: Check whether your PMC is registered with a trade body
  • Many reputable PMCs are members of ARMA, IRPM or similar bodies. These organisations have processes in place for dealing with PMC/leaseholder disputes in a fair and impartial manner
• Step 4: Escalate to the Property Ombudsman
  • If your PMC is not registered to a trade body, or if this has still not resolved your issue, consider escalating it to the Property Ombudsman https://www.tpos.co.uk/

For an alternative option, see our article ‘My Property Management Company is crap, how do I get rid of them?’

If you are unhappy with your PMC you may be considering replacing them. If you are googling this straight after an argument with your PMC, take a breath and ask yourself the following question: ‘Would an impartial third party would agree that the PMC underperformed or acted in a neglectful way?’.  There is a difference between being p*ssed of with them and having a realistic chance of removing them, however annoying that may be.

If the answer to this question is ‘yes’, read on…

First things first, you need to give the PMC the opportunity to rectify the issue.  Most PMCs will have a complaints procedure that you can follow, failing that check out the Housing Ombudsman.  If they still do not improve, there are a few options for removing your PMC if they are underperforming:

1. Wait until the contract expiry date and terminate the agreement
   • Property management contracts for residential buildings can by law only last a maximum of 12 months before they need to be renewed or terminated. If you are within the last few months of the contract, it might be sensible to simply not renew the current agreement and source a new Property Management Company.
2. Exercise your Right To Manage
   • See the section on Right To Manage for further details on this
3. Tribunal
   • If the PMC is performing so badly that immediate action is required, a tribunal might be the best option. If pursuing this route you will need to follow the correct procedures, and once at the tribunal you will need to demonstrate that the PMC has failed to manage your building properly
4. Setting up a Residents’ Association
   • These are formed to represent members (leaseholders) in the event of conflicts between residents and landlords. They provide a collective bargaining position by representing multiple leaseholders as a single voice.

No.  Our prices are fair and competitive for the level of service that we provide, and we make a reasonable margin that ensures we remain a healthy, profitable business.  There are plenty of cheap PropMan companies out there if that’s what you’re looking for, but you get what you pay for in this industry.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the North West.

1. FMS Estate ManagementBased in Poulton-le-Fylde and covering the whole of Lancashire and surrounding areas (including Manchester and Liverpool), FMS has a stellar reputation for providing a personal service to the blocks that they manage.

2. Haymarket Block ManagementLocated in Salford, from small properties housing 10 flats to high-rise developments holding hundreds of apartments, Haymarket offers a full management package to cover all freeholder responsibilities.

3. Regency EstatesRegency Estates is one of the leading independent family run estate agents and property management companies in the area.  They are based in Bolton and manage several residential property portfolios throughout the North West.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the North East.

1. Kingston Property ServicesIn an area covering the North East, Cumbria and Yorkshire, Kingston provides block and estate management services, and also has a lettings agency arm.

2. Potts GrayPotts Gray is a South Shields based company offering bespoke property management services to residents, both freehold and leasehold landlords, property management agents and developers. They manage sites across the North East that vary in nature and size.

3. Town & CityFounded in 2002 Town & City is a nationwide provider of property management services.  Their HQ is in Darlington.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the South West.

1. Harrison-Lavers & Potbury’sHL&P offers an extensive and comprehensive range of property services in Sidmouth and the surrounding area, including property sales and lettings of both residential and commercial properties. They have extensive experience in residential property management, as well as valuations and appraisals.

2. Alpha Housing ServicesWith family values at their core, Alpha Housing provides independent Residential Block and Estate Management Services Specialists in Dorset and Somerset.

3. Bath Leasehold Management LtdBath Leasehold Management was formed in 2019 and is a dynamic and proven independent block management company acting on behalf of an array of landlords, leaseholders and property companies in the South West.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the South East.

1. Burkinshaw Block ManagementBurkinshaw Block Management (BBM) is a privately owned, independent, professional company specialising in Block and Estate Management.  Their offering can range from a ‘consultancy/advisory’ service to a comprehensive management service.

2. Helen Breeze Property ManagementHelen Breeze specialises in Residential Lettings & Block Management in Sevenoaks, Tunbridge Wells, Tonbridge and the surrounding areas.

3. Metta Property Management LimitedMetta provides specialist block management services to Freeholders, Resident Management Companies and Right to Manage Companies.  They act with kindness, compassion and integrity, enabling them to provide an excellent level of service.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the Midlands.

1. Butlin Property ServicesButlin Property Services is a leading independent Leicestershire property manager and letting agent. The company has been providing professional assistance to landlords and their tenants throughout the East Midlands since 1997.  BPS has excellent client retention and a significant proportion of their business is achieved by recommendation from existing clients.

2. Principle Estate ManagementPrinciple is a property management specialist operating throughout the UK, with offices in Birmingham and London.  They manage over 9000 homes and 250 developments across the country.

3. ScanlansA residential block management specialist, Scanlans has been operating for over 25 years.  They have offices in Birmingham, Manchester and Leeds.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the London.

1. SBA Property ManagementSBA provide specialist residential block management and facilities management services to a wide range of clients including private landlords, developers and Resident Management Companies (RMCs) from their Central London offices.

2. Kinleigh Folkard & Hayward (KFH)Since their formation in 1977, KFH has diversified to provide a comprehensive range of services to the London property market including block management, build to rent, commercial property, and residential sales and lettings.

3. BrunsfieldWith a strong presence in London, Brunsfield specialises in the management of residential and commercial property throughout the UK from singular units through to large residential blocks and from retail units through to multi-let office buildings and mixed used developments.

There are over 1000 residential property management companies in the UK.  Each year our team at Vixus Property Management comes across a lot of these companies, either through talking to potential customers looking to switch companies, or at industry events and conferences.  As because so many folks know our thoughts and feelings (from this website) on all things ‘property management’, they often ask us who some of the other PropMan providers are in the area.

We’re never ones to shy away from being blatantly honest with respect to competition, and we want our customers to be as informed as possible.

Here is a list of some of the companies that have a solid track record in the Principality.

1. Western Permanent PropertyCardiff specialists WPP pride themselves in providing diverse expertise across a wide spectrum of services including finances, insurances, legalities and management duties.

2. Compton Property ManagementCompton is primarily a property development and freehold ground rent investment company. They are one of the largest ground rent companies in South Wales.  They are based in Swansea

3. West Quay Property ManagementFocusing mostly in the Barry area, West Quay Property Management was set up by Leaseholders for Leaseholders and is a non-profit making company.  They cover all aspects of block and estate property management within small and large properties, both residential and commercial.