How to change your block management agent: a guide for OMC Directors.

Changing block management agent can seem daunting for understandable reasons for Owners’ Management Company (OMC) directors. However, this is now happening more frequently across Ireland with increasing disputes between property management companies and their management agent. There can be many reasons why OMC directors may seek a change. Initially the developer would have appointed the block managing agent, often before the first unit is sold. When the final unit is sold the developer should resign from the management company and directors are appointed who are typically, and ideally, owners living in the development.

The owner directors may not be happy with the service they have received during this initial stage. Many developments will face many tasks in the next ten years to carry out major upgrades to, or replacement of, roofs, lifts and other assets. We are advising all owners’ management companies to prepare long-term Building Investment Fund reports as soon as possible, and then to start putting aside the funds needed for the works identified. Many block management agents have not been proactive on this or have no experience in this area. OMC’s are constantly looking to improve the service offer to the owners and to ensure simply that they are getting the best value for money for all services provided.

Before you seek to change your block management agent you should ensure you understand the terms of the PSRA agreement between both parties.

Is there a cause to terminate?

Read the terms and check if they require cause in order to terminate the contract. Some do not. If a cause is required, this will be described in the contract clearly. If no cause is required, you can terminate the contract for any reason.

Property agent breach

It would be in your best interest to terminate the contract if the managing agent has breached the terms of the contract. A breach can lead to putting your property and residents at risk. This should not be tolerated.

Notice period

The contract will specify the notice period required to terminate the agreement; this can range from 30 – 90 days. If you do not abide by the notice period, your request to terminate may result in being ignored or as serious as being in breach yourself.

Providing notice to terminate

This should always be completed in writing with the date of which the termination will take effect. Include in your notice to terminate the reasons for terminating.

Receive confirmation

The agent should confirm the termination in writing stating the date at which management ceases. This shows a paper trail and gives you a document that proves the termination has been requested and completed. Be sure to keep the confirmation as evidence of the process.

Notify owners

The property owners who pay a service charge should be notified that there is to be a change in the property manager. The current property manager may also do this. Notifying the owners in writing is the best practice.

Handover of funds

At the stage of handover, the agent must hand over the balance of funds not required to meet commitments already made, with the balance being handed over with a statement of accounts. The balance should be passed within three months unless otherwise agreed.

What next?

When deciding which block management agent to select there are a number of things to consider. A key way to determine an agent’s ability is to get references from existing developments that they manage and to follow those up, either by talking to a director of those developments or by visiting the development to check how it looks.

Preferably, you would like them to be managing developments similar to your own. You could also ask about the finances of those other OMCs with which they work with and the level of service charges owing.

Things to consider:

  • Does the managing agent understand the vision of the OMC directors?
  • Does the managing agent have the appropriate category D PSRA licence and are listed on the Register of Property Services Providers at www.psr.ie for Category Licensed property services providers?
  • OMC directors may wish to consider an agent’s industry experience and the knowledge and experience of the management team that will be appointed to your development.
  • Would there be any conflict of interest with the agent’s other property businesses?
  • Can the agent provide references from its existing client base and offer direct contact with their directors?
  • Does the agent have the required Professional Indemnity insurance and the correct level of cover?
  • Will the proposed managing agent be able to manage the transfer of the OMC in a timely and efficient manner?

Owen Reilly are experienced in assisting OMC directors in changing property managers. We are on a mission to change the way property management is carried out, delivering a transparent and proactive experience. The residents we look after can contact us at any time. We want to help make apartment developments in Dublin ‘better places to live’.

In today’s world communication and technology have become the driving factors in the property management sector to enable better engagement between owners, directors and residents. Our investment in technology solutions for the property management market ensure that we can offer a bespoke solution for all OMCs.

When a block managing agent has been chosen both parties should complete a ‘Letter of Engagement’ which is a legally binding contract between the OMC and the agent. It should clearly outline in a very prescriptive manner all property services to be provided, and all detailed costs involved.

Owen Reilly would be happy to discuss our vision of the role of the management agent in improving the quality of your development ensuring that your asset is maintained to the highest standard.

You can see more about our block management services here.