Estate management company types

In England and Wales, the management of blocks of flats and private estates is often done on a similar basis, through companies. Arrangements differ from place to place, and people often talk at cross-purposes due to a lack of agreed terminology.

So without being too prescriptive about terminology, I describe below some ways of looking at the phenomena involved, and what questions should be asked.

This matters because of what depends on it. You can't answer the question "how do I stop them charging me for services that are barely even being performed?" without some consideration of precisely who has the right to carry out management functions for your block of flats.

Questions to ask

• which entity has

How flat and estate management is linked

My own typology

Cribbed from a signal chat:

example setups:

• embedded management company - the MC is written into the TP1s/leases, and has no connection with the estate - you dont need to own a dwelling to be a member, and it can operate on other estates ... e.g., they just wrote FirstPort Ltd into the deeds; there is no need for an MA
• captive RMC - the MC is written into leases/TP1s, is only allowed to operate on that estate, appoints a separate entity as an MA, but its members are the dwelling owners. Potentially it may transition to a non-captive RMC. may be controlled by developer or MA.
• non-captive RMC: as per captive-RMC, but controlled by dwelling owners from an early stage. would tend to appoint an MA

Landmark Chambers' classification

See also Landmark Chambers' typology of management companies ("Type 3 manco" etc)

Legislation

particularly BSA SIs

MA defined in relation to RTAs(!)

The closest UK law seems to come to defining managing agent in general is in Schedule 1 para 9 of The Right to Manage (Prescribed Particulars and Forms) (England) Regulations 2010, which defers to section 30B(8) of the Landlord and Tenant Act 1985, which is wholly unsatisfactory as the definition in s30B(8) only really applies to s30B itself because it depends on the existence of a recognised tenants association: "an agent of the landlord appointed to discharge any of the landlord’s obligations to the tenants represented by the recognised tenants’ association in question which relate to the management by him of those premises". But of course during an RTM process, there generally won't be an RTA "in question".

property man regs

repairs oblgitionats

bailing in RMCs for lease exteensions (mid 80s LTAs)

RTM effect

Building Safety Act (and related secondary legislation)

HORNets discussion

Simon Davies' system

• A Remote freeholder managed. Freeholder does not live in the building, could be an offshore entity for example and using the building to extract a fee income via ground rents, permissions, commissions, lease extensions. The freeholder appoints the managing agent. There may be commercial elements in the building.
• B Freeholder managed with more than 25% commercial in the building. As A but leaseholders effectively cannot do Right to Manage or group enfranchisement (buy the freehold).
• C Freeholder managed, with one or more freeholders living in the building. One or more flats own the freehold of the building, all flats have long leases but some do not have a share in the freehold.
• D Residents Management company. All flats have an equal share in the freehold and control the management of it.
• E As D, but leaseholders have purchased the freehold from a previous freeholder, through a Residents Management company they set have up, and in which every leaseholder owns one share in the company
• F As D, Residents Management company with a tripartite lease has (as name suggests) 3 parties - freeholder (or headlessor), RMC and leaseholder. The RMC does not own the freehold.
• G Right to Manage company. The leaseholders control the management of the building, although the freeholder owns the common areas and fabric of it, and can still charge fees for ground rents, permissions and lease extensions for example.
• H Housing Association - shared ownership leases are usually with Housing Associations and they control the management of it. Occasionally there may be a freeholder above the housing association, so residents are sub leaseholders.
• I Commonhold - All flats collectively own the building and control the management of it. Widely used in the rest of the developed world except England and Wales.

What's out of scope

This article is about the management arrangements for "private" housing.

• wholly non-residential property
• Shared Ownership flats and houses
• leasehold houses more generally
• council housing
• housing association housing
• community land trusts

"Private" is in scare quotes above as "private housing" is used in the UK as shorthand for "unsubidised housing", which generally used to be owned publicly.

Since the 1980s, LVSTs have created a new widespread class of subsidised housing, run by housing associations. These are private bodies registered with the Financial Conduct Authority, but a lot of the arrangements are more similar to traditional council housing.