We are the board of a residents management company with 40 flats. We have never appointed an agent before - the developer's agent has always been in place. What should we be asking, and what do we remain responsible for once an agent is appointed?
An RMC remains legally responsible for the company's obligations under the leases and the Companies Act after appointing an agent, so the questions that matter are the ones that define the working relationship. Ask who the named property manager will be and what else they manage; what level of expenditure the agent may commit without board approval; the budget, demand and year-end accounts timetable measured against what the leases require; what company secretarial work is included; in whose name service-charge and reserve funds will be held; the complete fee schedule including Section 20, major works and leaseholder transaction charges; whether any commissions are taken from contractors, insurance or utilities; how repairs, inspections and compliance are handled and reported; and the term and termination provisions of the management agreement.
Appointing a managing agent does not transfer the RMC's obligations. The company remains the party bound by the leases, and the directors remain subject to their duties under the Companies Act 2006. The agent acts on the board's instructions within the authority the board gives it. Everything below flows from that.
Ask for the named property manager, how many other developments they handle, what support sits behind them, who covers absence, and how issues escalate. Ask to meet them before you decide, and ask how they would have handled a specific problem your building has had in the last year.
Agree a delegated expenditure limit in writing, and confirm what falls outside it entirely: legal proceedings, statutory consultation, capital works, insurance placement, engagement of professional consultants. Also agree what happens in a genuine emergency out of hours and how it is reported afterwards.
Ask for the annual timetable: when the draft budget is issued to the board, when demands go out, when the year-end accounts are prepared, and who certifies them. Check the agent's proposed timetable against what the leases actually require, because the lease timetable governs.
RMCs are companies. Confirm who maintains the register of members as flats change hands, who files the confirmation statement and accounts, who convenes and minutes the AGM and board meetings, and whether any of that is charged separately. Late filings are the company's problem, not the agent's, unless the agreement says otherwise.
Ask specifically: will the service-charge and reserve-fund accounts be in the RMC's name, or held by the agent? Who can see the balances, and how often does the board receive statements? What happens to the funds if the agent changes? Service-charge contributions are subject to the statutory trust provisions in section 42 of the Landlord and Tenant Act 1987, and the reserve fund is usually the hardest thing to recover on a handover.
Not the headline fee. The annual management fee, the accounts and certification fee, company secretarial charges, Section 20 consultation fees, major works project fees, leaseholder sales enquiry charges, out-of-hours cover, and onboarding or exit charges. Confirm whether VAT applies and how fees are reviewed.
Ask directly whether the agent or any connected company receives commission, rebate or mark-up from contractors, from the buildings insurance placement, or from communal utility supply, and if so how much and how it is disclosed. A low management fee funded by commission income is not a saving to the building.
How leaseholders report issues, response targets, how contractors are selected and vetted, how works are signed off before invoices are paid, inspection frequency, and what written report the board receives.
Who is responsible for tracking fire risk assessment actions, electrical and lift inspections, asbestos records and, where relevant, building-safety duties. Ask what compliance report the board receives and how overdue items are escalated.
Ask for the draft management agreement before you decide. Look at scope and exclusions, delegated authority, fees, term, renewal and termination. Notice periods vary between firms, so read the actual wording and take advice if anything is unclear.
An agent can make the board's job manageable. It cannot make the board's responsibilities disappear. The appointment that works is the one where the board knows what it has delegated, what it has kept, and how it will be told when something needs a decision.
The board is the client. Appointing an agent delegates the work, not the responsibility. The questions above are really one question asked nine ways: what exactly are we handing over, and how will we know it is being done?
Assuming the agent takes on the RMC's legal obligations
The company remains bound by the leases and the directors by their statutory duties.
Comparing headline management fees only
Accounts, company secretarial, Section 20, major works and transaction charges often exceed the difference between core fees.
Leaving delegated authority undefined
Disputes about what the agent should have asked the board about are almost always about an unwritten limit.
Not checking who files at Companies House
Late filing penalties and director exposure sit with the company, not the agent, unless agreed otherwise.
Signing the agreement after choosing rather than before
The agreement is part of the offer and should be read while you still have alternatives.
Most questions on this topic are management questions rather than legal ones, and the two are worth separating. A managing agent can tell you how something works day to day and what it will cost. A solicitor tells you what your rights are and how a Tribunal is likely to view them.
East Valley Properties provides management expertise, not legal advice. Where a matter turns on the wording of your lease or on formal proceedings, we will say so and work alongside your solicitor.
The official material behind this guide. We summarise it in plain English rather than reproducing it.
Service charge information rights, relevant to what the board should be able to produce.
Service charge contributions held on statutory trust.
The duties RMC directors owe regardless of the agent's involvement.
Free government-funded guidance for directors and leaseholders.
We manage small and medium residential blocks across Greater London and Essex from our Romford office. Fixed fees, no insurance commissions, and directors deal with us directly.
Answered by Romain Maillard - Director, East Valley Properties
Affiliate member of The Property Institute
Romain manages residential blocks and estates for RTM companies, residents' management companies, share of freehold developments and freeholders across East London and Essex.
Published · Updated
Based on the legislation and official guidance cited on this page.
General property management information, not legal or professional advice. Where a decision depends on an individual lease, building, dispute or technical assessment, obtain specialist advice. See our editorial standards.
This answer has been anonymised. Personal details, addresses and company names have been removed. Guidance is general and does not replace advice from a solicitor or surveyor on your specific block. East Valley Properties is a managing agent, not a firm of solicitors or legal advisers.
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