Donning the hat of an undercover economist let us explain what we believe is an underlying problem with the management style of some leasehold managing agents:

A managing agent is rewarded for their work, no matter how good, mediocre or down right awful a service provided. Leases do not provide scope for a merit based reward system of management fees and so there is no incentive for managing agents to provide more than the minimum leaseholders will tolerate. In practice some agents are quite adept at lowering your expectations of what they should deliver. To understand why an agent might do this lets look at the problem from the other perspective:

A managing agent with a portfolio of properties knows the company’s bottom line can be improved by loading more work onto each property manager. For a negligible increase in salary bill and running costs the managing agent increases his profitability secure in the knowledge that the leaseholders will eventually become resigned to a lower level of service because they have little control over the managing agent’s appointment. Until the arrival of the Commonhold and Leasehold Reform Act 2002. Now leaseholders have a low cost way of fighting back with the introduction of the Right to Manage. Without the expense of buying the freehold leaseholders can assert their right to take away the management of a building from an unsatisfactory agent.

In our opinion it is difficult to differentiate a good managing agent from a lying toad before you try using their services. If you exercise your Right to Manage option a managing agent knows it is easy to replace them if they fail to deliver on their promises. The more leaseholders who choose Right to Manage the more mediocre managing agents will be forced to reform and the awful cease to trade.

Right to Manage: you know it makes sense, we know it makes sense and those who don’t stand to lose your account.