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Acting for the landlord: managing agents

8 Acting for the landlord: managing agents

This chapter considers property management from the perspective of managing agents (sometimes referred to as property managers, block managers or, in Scotland, as property factors) that typically manage whole blocks of flats or estates with communal areas. (For property management from the perspective of letting agents typically managing individual properties, see chapter 7.) This chapter focuses on maintaining the structure of the whole block and estate, the management of communal services and the recovery of costs by way of service charges and estate charges.

The vast majority of owner-occupied flats in England and Wales have been sold on a residential long-leasehold tenure, which is defined as a tenancy for a fixed term of more than 21 years. As this type of tenure is unique to England and Wales, this chapter focuses on the contractual relationships, statutes and Regulations specific to those regions. The principles, however, are applicable in Northern Ireland and Scotland where they do not conflict with the legislation of those administrations.

Although legislation typically uses the term ‘tenant’, this chapter uses the term ‘leaseholder’ to represent the person who owns the leasehold interest and is liable under its terms to pay the service charge and ground rent. This is to avoid confusion with tenants under assured tenancies, ASTs, or regulated or secure tenancies who are referred to as ‘tenants’ throughout these standards.

The Service Charge Residential Management Code (the ‘Service Charge Code’) is an approved code of practice under section 87 of the Leasehold Reform, Housing and Urban Development Act 1993, with which landlords in England and Wales are expected to comply. This chapter complements the Service Charge Code in areas of best practice expected of property managers acting for or as landlords. You should be aware of the detailed content of the Service Charge Code and ensure compliance on behalf of your clients.

In Scotland, the Property Factors (Scotland) Act 2011 introduced the legal requirement for a property factor to be registered and to comply with a statutory ‘property factor code of conduct’ prescribed by Scottish ministers. At the time of writing, the register has not yet been established and the code is in early draft stages with Scottish government.

The Northern Ireland Law Commission (NILC) is currently reviewing legislation around multi-unit developments in Northern Ireland.

The guidance in this chapter will help you to meet the following principles in the Real Estate Agency Code:

1.

To conduct business in an honest, fair and professional manner.

2.  

To carry out work with due skill, care and diligence and ensure that staff employed have the necessary skills to carry out their tasks.

5.

Not to discriminate unfairly in any of their dealings.

6.

To ensure that all their communications are fair, clear, timely and transparent in all dealings with clients.
10. To ensure that they make it clear to all parties for whom they are acting, and the scope of their obligations to each party.

This chapter also provides guidance that will help towards meeting the relevant requirements of legislation summarised in chapter 12. You can read more about the Acts and Regulations in the specific sections shown in the table below. However, chapter 12 is not intended to be a fully comprehensive list of regulations and guidance notes that managing agents need to know. Therefore, they are referred to Appendix III of the Service Charge Code, which has a more extensive list of these.