Karen Bright, Partner and Head of Litigation & Disputes at Bishop & Sewell, advises on making sure you have the right managing agent and the importance of engaging with them.
As a landlord, having a good managing agent you can rely on and trust is very important. A managing agent is deemed to be the representative of the landlord and therefore anything which it does – or does not do – could have a material effect on the landlord. It would be unlikely that a landlord would be able to deny responsibility for an act of its agent, as the agent will be deemed to be acting on the landlord’s behalf and this is the case regardless as to whether it has the authority to do so.
It is therefore important that a landlord ensures that it employs the right managing agent and engages with it in a way to get the best from it and so as to protect the landlord’s interests.
What are a managing agent’s main responsibilities?
The fundamental basics are to ensure that your managing agent knows whether all the leases for a building it is managing are on the same terms and that it is familiar with the terms of the leases. It is surprising how many times these points are missed. A common example is in relation to maintenance or repair works at a property, which are likely to be expensive. The landlord has either carried out the works or is intending to but the lessee has failed to pay its contribution. The landlord seeks legal advice on how to get the lessee to pay. The advice from the lawyer is that a lessee is only obliged to make payment if certain requirements are met, the most fundamental of these is that the landlord is only permitted to carry out works as set out in the lease and it may only recover the costs of doing so if that is permitted under the terms of the service charge or maintenance fund, contained within the lease. For example, if the windows to a lessee’s flat are demised to the lessee and the lessee is obliged to keep them in a good and substantial state of repair; if a landlord comes along and carries out maintenance works to the windows, not only may it be trespassing, but it will also not be able to recover the costs of doing those works as they are not permitted under the terms of the lease. It is therefore essential for the managing agent to read and understand the terms of the leases.
Ensure clear lines of authority
The managing agent should be given clear lines of authority, for example, to send out approved ground rent and service charge demands, and it should have a procedure in place for chasing those payments should they not be made. There should be clear guidance provided as to when matters should be referred to solicitors where arrears of rent and service charge arise.
Why having regular update meetings is useful
It is also good practice to have regular, say, monthly meetings with the managing agent to review the levels of ground rent and service charge arrears and any other issues which may have arisen, such as complaints.
Lessees’ complaints can be a real headache for a landlord and, for whatever reason, if a managing agent does not deal with a complaint, particularly in relation to repairing obligations, this may result in a claim against the landlord for any losses which are suffered by the lessee.
Likewise, any request for consent to alter the premises should always be referred to the landlord and appropriate legal advice sought. If a managing agent becomes aware of any potential breaches of lease, these should be immediately reported to the landlord before any correspondence is entered into with the lessee.
Having a good managing agent who understands your property and knows when it should refer matters to a landlord should hopefully assist in having a properly run building without too many problems.
Karen Bright is a Partner and Head of Litigation & Disputes at Bishop & Sewell.
