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This is an all-too-common practice, especially with the larger managing agents and getting out of such an arrangement is complicated and costly but the good news is that it can be done.

St. George’s Park is a mixed tenure development of 172 properties, a combination of new build flats and houses with a 170-year-old manor building (now 87 properties) as the centre piece.

The managing agent, a large national company that has been mentioned on more than one occasion during prime minister’s questions (and not in a good way) was appointed by the developers and had themselves written into the leases as a party.

Whilst the leases had a provision to remove them, considerable barriers existed in that the requirements were

–              75% of the owners must indicate to the agent, in writing within a six-month period that they wish to remove the incumbent managing agent.

–              At least 50% of the same owners must agree on a replacement managing agent.

Following more than a decade of woeful financial management and dwindling reserves, a highly motivated residents’ association managed to achieve the above. All owners of property at St George’s formed a company, elected a board of directors and Common Ground were informed in May 2015 that they were the successful bidder following an extensive tender process.

“Common Ground were appointed based on the transparency of their service, especially the accounting side with Xero. Whilst there was no evidence of fraud there was unwise expenditure and, as property owners we had little trust in the incumbent agent.  The ability to oversee the finances, particularly our crucial reserves in real time was critical,” said Kunku Soota, chair of the board of directors, at the time.

Incredibly, the incumbent agent wouldn’t allow the full transfer of the management until at least 85% of the properties had agreed deeds of release and novation………another legal move designed to protect their business. This took a further two years and £17,000 in legal fees, a figure that would have been more had not one of the directors been a qualified expert in property law. Once appointed Common Ground took on the administrative role of completing the final task of securing deeds of release and novation from all property owners. This accelerated the removal of an unwanted and underperforming agent.”

Almost five years on “the owner directors of the company are in control of budgets as well as schedules of property maintenance and redecoration, this allows us to smooth the cash flow and maintain healthy reserves,“ said Christian Roth, now chair of the board.

“This case study is a great example of what can be achieved by motivated residents in conjunction with a knowledgeable and committed managing agent”. It took four years to prise the management away from the incumbent agent, but the resident’s association were very well led and it was a real team effort to get this done but it gives hope to other developments tied into such dubious agreements” stated Alan Draper. Managing Director of Common Ground.

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