How to Change Your Managing Agent: A Step-by-Step Guide

Changing managing agent is one of the most effective things a board can do for a struggling building, and it's usually simpler than directors expect. Here is how it works in practice.

1. Check who appoints the agent

The managing agent is appointed by whoever holds the management obligations under the lease. That is usually the freeholder, a resident management company (RMC) or a Right to Manage (RTM) company. If leaseholders own the freehold or have an RMC or RTM company, the directors can make the change. If a third-party freeholder appoints the agent, leaseholders can still apply pressure, and may have routes such as Right to Manage.

2. Read the management agreement

Find the current management agreement and check the term, the notice period (often three months) and any termination fees. Agreements for more than twelve months can also be "qualifying long-term agreements", which bring their own consultation requirements. Take advice if anything is unclear.

3. Choose the new agent on substance

Ask shortlisted agents how they actually deliver maintenance, how many buildings each property manager looks after, what is included in the fee and what is charged on top, how client money is protected, and which redress scheme they belong to. Ask to see a sample board report.

4. Serve notice and plan the handover

Once the board has resolved to change, serve notice in line with the agreement. A good incoming agent will then manage the handover with the outgoing one. That covers:

• Client funds, including reserve funds, transferred with a reconciliation
• Service charge accounts, budgets and the arrears ledger
• Leaseholder records and correspondence
• Contracts, warranties and insurance documents
• Fire risk assessments, asbestos registers and every other compliance record
• Keys, fobs, codes and access information

The RICS Service Charge Residential Management Code sets out good practice for handovers, and a professional outgoing agent should cooperate. Problems usually come from missing compliance documents and unreconciled funds, so chase those first.