Last friday we sent out a letter regarding ‘right to manage’ to leaseholders of a block Young Group co-invested in with our clients a number of years ago. Below is the main part of the letter – I have blanked out certain names for confidentiality reasons:
I am writing in reference to your investment in XXXX that we manage. As you will know, at Young Group we take this role very seriously and are always looking at how to enhance your asset’s value, be that through your rental income or capital value.
An area that many people do not monitor is the way the fabric of the building is maintained; are the communal areas looked after, is security good and how responsive are the block managers?
NB, Young London manage everything in your apartment inside the front door, the block/managing agent look after the communal areas of
This letter concerns the performance of the block managing agent.
Through the work of our estate agency, Young London, Young Group has been acutely aware of inefficiencies and shortfalls in the block management at XXXX. Aside from concerns regarding the day-to-day management of the block, of particular concern is the managing agent’s slow speed of response to issues. We have also been advised that there are costs within the service charge that are high, especially regarding the insurance of the block.
With these concerns in mind, Young Group is recommending that leaseholders at XXXX carry out a Right to Manage (RTM). It enables the leaseholders (you and me) to appoint a new block managing agent of their choice, rather than the choice of the freeholder (who in this instance own the current managing agent).
Right To Manage (RTM)
All leaseholders are entitled to join the RTM company. We require over 50% of leaseholders to support this action to change the block managing agent.
The private Residents’ Association (RA) and the Housing Association (HA) in XXXX have both already lent their support to the Right
to Manage and to appointing a new managing agent for the development.
It now requires the support of our investor leaseholders.
Initiated by Young Group, both the RA and the HA have held various meetings and have selected Chainbow as their preferred managing agent.
Chainbow is an experienced property management company that has a robust track record – we have worked with them for a number of years and they are managing agents of other schemes that we are involved in. Chainbow has long campaigned for leaseholders’ rights and raising standards of transparency in service charges in the residential property sector. More information regarding Chainbow can be found at www.chainbow.com.
A contribution of £25 plus VAT (£29.38) per leaseholder is required to join the RTM company.
This float will be placed into the RTM company accounts to cover expenses involved during the process of setting up the RTM company and the legal process of appointing a new Managing Agent. Any surplus at the end of the process will be returned.
The Next Steps
In order to change the Managing Agent over 50% of the leaseholders in
the block must join the RTM company.
To reiterate, in our opinion the benefits will be both financial (both through lower service charge in time and enhancing overall value of your investment) and better service.
If you are in agreement, there are 2 steps that need to be taken:
1. Payment is required For ease of administration, £25 plus VAT can be collected from your tenant’s next rental payment
2. Written Agreement that you are happy for the legal process to get underway. To formalise your response to this email, please email the following wording to XXXX:
“I agree to participate in the formation of a right to manage company for the running of XXXX and to become a member thereof.”
There is a set legal framework to follow and we will of course keep you updated with progress of the RTM formation and changeover of managing agent. In the meantime, should you have any questions, feel free to contact our Property Manager, Christo Du Plessis at the Young London office on +44 (0) 20 7593 3300 or your P
I very much look forward to a successful and smooth transition process that will result in XXXX being managed in a more cost efficient manner and to a higher standard for the benefit of all of us who have invested in property at the development.
I look forward to your support.
CEO, Young Group”
I will write another blog shortly regarding the support we have had and the comments that have been written.
Young Group takes it role of managing our clients assets very seriously, this is another example of that.
To be continued . . . why not sign up by subscribing - on the right hand nav below tweets.