What is Block Management?

Block management has become an increasingly important service in recent years, mainly due to the steadily rising number of apartment blocks in modern towns and cities.

There are plenty of people who might – and do! – grumble at the sight of their service charge and assume that the block management firm is getting all of that cash, yet this is far from the case. Often, Residents are actually getting an impressive return for a relatively small charge. So what exactly do residents get out of block management services?

What is block management?

Block management is what it says on the tin: managing a residential block of flats where the individual properties are owned by various leaseholders (or share of freehold). It involves maintaining the building’s structure and shared spaces, dealing with insurance, financial accounting, and providing administrative support. Alongside this, block managers also have many legal responsibilities.

Residential block management is not to be confused with property management which typically refers to the operation, maintenance and oversight of rental properties on behalf of the landlord, or commercial management, which is the management of office and retail space.

What are leaseholders?

In England, most flats are owned on a leasehold basis. This could be purpose-built developments, converted houses or residential apartments above retail or commercial space. The structure of the building and the land it sits on is owned by the freeholder (or landlord). The purchaser buys the right to occupy one of the properties for a set number of years from the freeholder. A leaseholder (or tenant) is the legal term for the person who has bought the lease.

The lease sets out the contractual obligations of both parties. The leaseholder’s responsibilities will include payment of service charges and abiding by particular conditions of the use and occupation of the flat. The freeholder will be required to maintain, manage the building, collect service charges from all leaseholders, insure the building and keep the financial accounts.

What are service charges?

Service charges are payments from the leaseholder to the freeholder to cover their share of the cost of the services the freeholder provides.

Details of the service charge, and portion payable by each leaseholder, are set out in the lease agreement.

What services does a block managing agent provide?

Some freeholders choose to manage the building themselves, but it is more common for them to hire a professional block management company to maintain the property on their behalf.

Here are the key services that a block manager will provide:

Service management

A block management company will look after the building itself and maintain the communal areas. This could be anything from replacing an old roof to fixing a broken lift or maintaining gardens.

The block manager will ensure that trusted contractors carry out the work and will check that work is carried out promptly and to a high standard. The law demands that at least two quotes per job are obtained, and block managers must be fully transparent about how the service charge is spent.

Whilst most jobs will be non-urgent, a block management company will provide a 24-hour response in emergencies.

Insurance and claims

Freeholders must have various insurance policies, including buildings, contents and liability insurance. The block management company will ensure the building is appropriately covered and will deal with any insurance claims.

Of course, leaseholders are responsible for insuring the contents of their flats.

Site visits

A block management company will regularly visit to ensure that the building and communal areas are in good working order and compliant with health and safety regulations.

Legal compliance

A block manager also must wear a legal hat. They must know and understand all the lease terms (sometimes these differ between flats) and enforce these terms.

As you might expect, there is also a raft of health and safety laws covering residential buildings. The block manager’s job is to keep up to date with these and ensure the building is fully compliant. Block managers are also responsible for fire risk assessments and ensuring that the correct fire safety measures are in place.

Accounts and support services

Alongside building maintenance, a block management company will also undertake the administrative work to collect the service charge from all leaseholders, pay contractors and manage the budget. They must also ensure that the accounting records are kept up to date and legally compliant and the annual accounts are prepared and submitted correctly.

What is the alternative to block management?

Property owners can club together and manage their building, but this has a habit of causing difficulties. Relationships can be tested when neighbours need to talk about financial matters, and residents may simply not have the skills required to keep a building going and – importantly – legally compliant with the relevant regulations.

We can help

Please get in touch today for any block management queries or to discuss how Kubie Gold could help you manage your building.