What is Block Management – A Complete Guide

Block management is the name for the industry in which block management companies provide management services to residential leasehold buildings in the UK.

Block management specifically refers to the management of residential (i.e. flats) or mixed tenure (i.e. flats built on top of retail/office units) structures. This is not to be confused with property management which is typically used to refer to the management of the flats or houses, as well as commercial management which refers to the management of offices, retail, and so on.

The block management industry is relatively young in comparison to other industries, with leasehold law dating back barely 70 years.

This article will not only guide you through what the relationship is between block management companies and leaseholders, but it will also provide guidance on industry terminology and structure.

What is a block management company responsible for?

Block management companies are typically engaged by the Freeholder, a Residents Management Company, a Right to Manage Company or a similar party. They’re responsible for the provision of services under the terms of the Lease.

There is no generic list of services that can be applied to every building in the UK however, if we look to the Lease it will detail the services the ‘Landlord’ is responsible for and therefore subsequently the block management company.

Typical block management services will include the placing of building insurance, ensuring contracts such as cleaning are in place and value for money, ongoing day to day repairs and maintenance and so on. Block management companies require a diverse range of knowledge in areas such as accounting, health and safety, law, insurance and construction.

What are Leaseholders?

A leaseholder is a legal term for the tenant who has been issued a long lease (over 21 years) by the landlord in a leasehold structure.

Leaseholders are issued a Lease which is a legally binding contract to occupy a space (a flat) for a set period of time over 21 years. When buying a leasehold flat, you are agreeing to occupy the space along with agreeing to the covenants contained therein. There are always covenants for the tenant and the landlord as with any contract which will cover the tenant’s responsibilities, the use of the flat, what happens when the lease runs out and so on.

Why do you have to pay a service charge and what is included in the charge?

Within the terms of the lease which you signed when purchasing the flat, you will have agreed to pay a service charge (as well as a possible ground rent) to the landlord in the manner in which the lease stipulates, whether that be annual, half-yearly or quarterly being the typical payment periods. Service charges payments received are then used to pay for the services which will be detailed in the lease, for cleaning, insurance, repairs, maintenance and so on. The service charge is also used to pay the management fee of the block management company.

Service charges are paid each year (although the frequency may differ depending on the lease terms) with the collective charges held in a trust account by the landlord or the block management company acting on their behalf.

At the start of the financial period, a budget will be produced, typically by the block management company, with each leaseholder then being sent an invoice for their proportion of that budget. Without going into the complexities of the invoicing terms, it is right to advise that all invoices must be accompanied by the summary of tenants’ rights and obligations, otherwise, these are not due.

Are there any block management courses?

Whilst there is no formal qualification required for working in block management, there are a number of options available to employees that can help them to excel within the industry.

Prior to entering the industry, there are a number of real estate management degrees now available through well-known universities, giving a fantastic base of knowledge before entering the industry formally.

Once working for a block management company, you can start to undertake qualifications through the Institute of Residential Property Management, from foundation through to member, with certain members being asked to become a fellow.

The Royal Institution of Chartered Surveyors also has an avenue of qualification through their   Assoc-RICS accreditation. All of these qualifications are voluntary however entirely encouraged at Strangford Management. They not only show a base of knowledge that will elevate a property manager over their colleagues, most importantly it shows clients that their advice can be trusted leading to better overall relationships.

Who Regulates Block Management Companies?

Currently, there is no governmental body that regulates the block management industry however there are self-regulatory bodies that provide such safeguarding for leaseholders.

The Association of Residential Managing Agents is the main regulatory body for managing agents in the UK. ARMA have certain criteria that agents must adhere to, ensuring the highest standards in the management of their buildings and clients.

Of course, there are regulatory bodies that block management companies must join, such as the Information Commissioner’s Office for data protection as well as the Property Ombudsman for recourse over service complaints.

How do I find the best London Block Management services?

As you can see, block management services are unique to each building and lease. At Strangford Management there is no ‘standard service’ that is provided. We tailor our services to every individual client; each Strangford Management client receives the following contractual commitments:

• A dedicated Property Manager
• Your own personal online portal
• Real-time status updates
• Real-time accounting
• Strangford Management technology and contacts

What makes us different from other managing agents is our world-class customer service, on a local scale. We are the first London block management company to provide our clients with a single management fee.

Our digital on-demand portal for each leaseholder allows them to download documents, check finances, get repair & maintenance updates, and pay your invoices. Our partnerships with London’s top professionals from contractors to lawyers, give our clients exclusive buying power.

Learn more about our block management services and our holistic approach to the management of your property.