How to Change Your Managing Agent: From Notice to Handover
A practical route for RMC and RTM boards: deciding to switch, checking the contract term and section 20, running a tender, and managing the handover.
Plymouth Block Management is an ISO 9001:2015 certified managing agent (certificate FS 685565, audited by BSI) and a member of The Property Ombudsman, managing residential blocks across Devon and Cornwall.
Photo: cottonbro studio / Pexels
Changing managing agent is four jobs in sequence: establishing that the agent rather than the lease or the budget is the problem, reading the management agreement for term and notice, running a tender that produces comparable bids, and controlling the handover. No statute tells you how to dismiss a managing agent. What governs you is the contract you signed, your company’s articles, and, if the new agreement runs for more than twelve months, section 20 of the Landlord and Tenant Act 1985.
Separate What the Agent Controls from What They Do Not
An agent controls whether demands and accounts go out on time and add up, whether the compliance documents exist and are in date, whether repairs are instructed and chased, whether contractor prices are tested, and whether consultation is done properly. An agent does not control a lease that will not permit recovery of a cost, a block that has never collected a reserve fund, an external wall problem inherited from the developer, or leaseholders who cannot pay.
Changing agent fixes the first list and does nothing to the second. Work through the signs of a badly managed block, then write your own version of both lists before you go to market: it becomes the specification you tender against, and it stops you buying the same service from a different letterhead.
Work Out Who Holds the Appointment
The right to change the agent belongs to whoever engaged them, which is not always the people doing the complaining.
| Who manages the block | Who holds the appointment | What leaseholders can do |
|---|---|---|
| A resident management company that is a party to the leases | The RMC board, acting under the articles | Elect or remove directors, and requisition a general meeting if the articles allow |
| An RTM company that has acquired the right to manage | The RTM company board | The same, as members of the RTM company |
| The freeholder or a head landlord | The landlord | Form a recognised tenants’ association and use section 30B, claim the right to manage, or apply to the First-tier Tribunal under section 24 of the Landlord and Tenant Act 1987 |
If an RMC or RTM company holds the appointment, this is a board decision and no leaseholder vote is required unless the articles say so. If the landlord holds it, leaseholders have no direct power of removal.
The Section 30B Consultation Right
Under section 30B of the Landlord and Tenant Act 1985 a recognised tenants’ association may serve notice on the landlord requesting consultation about the appointment or employment of a managing agent. Where no agent is employed, the landlord must then name the proposed agent, set out the landlord obligations that agent will discharge, and allow a period of not less than one month beginning with the date of service for observations. Where an agent is already in place, the landlord must serve notice within one month specifying the obligations discharged and a reasonable period for observations on performance, then repeat that at least once in every five years and on each new appointment.
That is a right to be heard, not a veto, and it depends on recognition. Under section 29, recognition comes either from a written notice given by the landlord to the association’s secretary or from a certificate: in England the certificate is issued by the First-tier Tribunal, whereas in Wales it comes from a member of the local rent assessment committee panel.
Where management has broken down, section 24 of the Landlord and Tenant Act 1987 lets the tribunal appoint a manager. The grounds include breach of an obligation relating to management of the premises, unreasonable service charges having been made or being proposed or likely, and failure to comply with a relevant provision of an approved code of practice, with a catch-all where other circumstances make it just and convenient; in each case the tribunal must also be satisfied that it is just and convenient. That is a serious application with its own procedure. Acquiring the right to manage is the calmer route where the complaint is about who manages rather than about misconduct.
Read the Management Agreement Before You Speak to the Agent
Pull the signed agreement and any variation letters, and find six things: the length of the term and whether it has rolled over; the notice period and who may serve on whom; the form of notice and the address it must go to; whether notice can only expire on particular dates; any fee payable on termination, including charges for handover work or year end accounts; and whether the agent holds any role beyond management, such as company secretary, registered office or bank signatory.
Three months is a common notice period, but the wording matters more than the number. In Corvan (Properties) Ltd v Abdel-Mahmoud [2018] EWCA Civ 1102, decided on 15 May 2018, the contract said the period “will be for a period of one year from the date of signature hereof and will continue thereafter until terminated upon three months’ notice by either party”. The Court of Appeal held that this was an agreement for a term of more than twelve months: “will continue thereafter” meant it had to run past the first year, so notice given inside the first twelve months could only take effect once they had expired.
Apply that test to the contract you are leaving and to every contract you are offered. And unless conduct forces your hand, do not serve notice until you know where you are going: a block with no agent and no bank mandate for six weeks is a worse problem than the one you started with.
Whether Section 20 Applies to the New Appointment
Section 20ZA(2) of the Landlord and Tenant Act 1985 defines a qualifying long term agreement as one entered into by or on behalf of the landlord or a superior landlord for a term of more than twelve months. Section 30 defines “landlord” as including any person who has a right to enforce payment of a service charge, so an RMC or RTM company that demands service charges is caught. Boards routinely assume this is a freeholder’s problem. It is not.
Regulation 3 of the Service Charges (Consultation Requirements) (England) Regulations 2003 takes some agreements out of the definition, including a contract of employment, an agreement between a holding company and one of its subsidiaries or between two subsidiaries of the same holding company, and an agreement made when there were no tenants and for a term not exceeding five years.
Regulation 4 sets the trigger: section 20 applies if relevant costs under the agreement in an accounting period exceed an amount which results in any tenant’s relevant contribution for that period being more than £100. A management fee for a block of normal size will clear that. If the requirements are not followed and the tribunal grants no dispensation under section 20ZA(1), section 20(7) limits each affected leaseholder’s contribution to the prescribed amount, £100 for that accounting period, and the shortfall lands on the company. The section 20 route for major works follows a different schedule, but the same discipline.
| Stage | What has to happen | Timing |
|---|---|---|
| Notice of intention | Written notice to each tenant, and to any recognised tenants’ association, describing the relevant matters or saying where a description may be inspected, giving reasons, and inviting written observations | Observations within the relevant period, being 30 days from the date of the notice |
| Nominations | Tenants and any recognised tenants’ association may nominate a person from whom the landlord should try to obtain an estimate | Within the same 30 day period |
| Proposals | At least two proposals, at least one proposing that the services come from a person wholly unconnected with the landlord, each stating the parties, any connection with the landlord and the estimated cost | No period fixed by the regulations |
| Notice of proposals | Proposals sent to each tenant and any association, inviting written observations, which the landlord must have regard to | Observations within 30 days of that notice |
| Reasons | Notice of the reasons for entering into the agreement, or of where they may be inspected | Within 21 days of entering into the agreement, unless the chosen provider was nominated or gave the lowest estimate |
Schedule 2 applies instead where public notice of the agreement is required, which is unusual in a privately owned block. Many agents offer a twelve month term precisely to stay outside the regime, which is legitimate. Signing a three year agreement and hoping nobody checks is not.
Run a Tender That Produces Comparable Bids
Three bids priced against three different assumptions tell you nothing. Send every candidate the same pack: a sample of each lease type, the last two sets of certified accounts, the current budget and apportionment schedule, an arrears summary, a schedule of contracts with expiry dates and notice periods, the reserve fund balance and what it is earmarked for, the compliance documents with their dates, and a note of any live dispute.
- Ask for the fee expressed the same way by everyone: an amount per unit per year, plus a written list of everything charged separately.
- Ask which redress scheme they belong to and for the membership number, then check it independently.
- Ask where client money will be held, whether there is a separate account for your property, in whose name, and who keeps the interest.
- Ask in writing whether they take commission on insurance placement or on contractor invoices.
- Ask who the named property manager would be and what happens out of hours.
- Ask for two current RMC or RTM chairs at buildings of similar size, and call them.
Redress scheme membership is compulsory, not a badge. In England, article 5 of the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 requires a person who engages in property management work to belong to a scheme approved or designated by the Secretary of State, and article 8 allows an enforcement authority to impose a monetary penalty of up to £5,000 for breach. Codes of practice work differently: under section 87 of the Leasehold Reform, Housing and Urban Development Act 1993, failing to comply with an approved code does not of itself make anyone liable to proceedings, but the code is admissible in evidence and a tribunal must take relevant provisions into account. There are more questions worth putting to a managing agent before you shortlist.
Decide, Minute It, and Serve Notice Exactly as the Contract Requires
The appointment is a board decision. Check the articles for quorum and for anything needing a resolution of the members, then minute the comparison and the reasons rather than only the outcome; the duties that come with being an RMC director apply to this decision as to any other. If members expect to be consulted even where the articles do not require it, consult them: a switch that half the building resents is expensive in other ways.
Where the notice period allows, end the outgoing appointment at the service charge year end, so that one agent is responsible for one full year of income and expenditure and the accounts have a single author. If you cannot wait, agree in writing who prepares the part year accounts and who holds the records for that period.
Serve notice in the form, to the address and by the method the agreement specifies, and keep proof of service. Then work through the consequences: the registered office if the agent provided it, the bank mandate, the insurer and broker, utility and contractor accounts, and the address leaseholders use. Section 48 of the Landlord and Tenant Act 1987 requires a landlord to furnish the tenant by notice with an address in England and Wales at which notices may be served, and until that is done any rent, service charge or administration charge is treated as not being due.
Control the Handover, Because No Statute Will Do It for You
When an RTM company acquires the right to manage there is a statutory transfer of money: section 94 of the Commonhold and Leasehold Reform Act 2002 obliges the landlord, or a manager appointed under the 1987 Act, to pay accrued uncommitted service charges to the RTM company on the acquisition date or as soon after as is reasonably practicable, with either party able to ask the tribunal to determine the amount. A change of agent has no equivalent. Everything you receive, you receive because a contract says so.
So put a dated handover schedule in the new management agreement and repeat it in the letter to the outgoing agent. Ask for:
- Money: the balance on each client account reconciled to the last certified accounts, the current year ledgers, the arrears schedule with the status of any legal action, and the reserve fund balance with what it is earmarked for.
- Records and title: three years of accounts, the current budget and apportionment schedules, every lease including variations, any licences to alter and deeds of variation, and the freehold or headlease title.
- The recorded fire risk assessment. Article 9(6) and (7) of the Regulatory Reform (Fire Safety) Order 2005 requires the responsible person to record the assessment, including its findings and the measures taken or to be taken, and any group of persons identified as being especially at risk.
- Other compliance records: the asbestos survey and management plan, the electrical installation condition report, lift examination reports, the legionella risk assessment, and servicing records for alarms, emergency lighting and smoke ventilation.
- The health and safety file, which under regulation 4 of the Construction (Design and Management) Regulations 2015 must be kept available for inspection by any person who may need it to comply with a relevant legal requirement. It usually sits on the agent’s system, so ask for it by name.
- For a higher-risk building, the safety case material and the building information held for it.
- Contracts and insurance: every supplier agreement with expiry dates and notice periods, any section 20 consultation in progress with the stage reached, the policy and schedule, and any open claim.
- Data and access: leaseholder and resident records transferred on a documented basis under the UK GDPR, correspondence files, keys, fobs, access codes and building plans.
Set two dates, one for funds and one for records, and if the outgoing agreement allows it, hold the final fee against completion. A written handover checklist signed off item by item is the difference between a clean transfer and a year of chasing.
If you are at the tender stage, the quickest way to make bids comparable is to require three things in writing from each candidate: a fee fixed in advance, a statement of whether any commission is taken on contractor invoices, and confirmation of where client money will sit and who keeps the interest. Plymouth Block Management works on that basis across Devon, Cornwall and the wider South West: a fixed management fee agreed in advance, no commission on contractor invoices, and client money in named Lloyds accounts, one per managed property, with interest retained by the client. If your board wants to talk the mechanics through before serving notice, get in touch.
Common Questions
The questions boards ask most often once they have decided to move.
Do We Have to Consult Leaseholders Before Appointing a New Managing Agent?
Only if the new agreement is a qualifying long term agreement, meaning a term of more than twelve months, and the cost in an accounting period would mean any one leaseholder contributing more than £100 towards it. If both are true, the Schedule 1 procedure in the Service Charges (Consultation Requirements) (England) Regulations 2003 applies, with a 30 day window for observations after the notice of intention and again after the notice of proposals. If the agreement runs for twelve months or less, section 20 does not apply.
How Much Notice Do We Have to Give Our Current Agent?
Whatever the management agreement says. No statute sets a minimum notice period for ending a management contract. Three months is common, but check who may serve notice, in what form, to which address, and whether it can only expire on particular dates. Check too whether any fee falls due on termination.
Should We Change Agent Part Way Through the Service Charge Year?
Prefer the year end where the notice period allows it, so that one agent is responsible for one full year of accounts and one set of demands. If you cannot wait, agree in writing before the handover who prepares the accounts for the part year and who holds the records for that period.
What Can We Do If the Outgoing Agent Will Not Release the Money or the Records?
The claim is contractual, so start with a written demand citing the clause and setting a deadline. Escalate to the agent’s redress scheme, since membership is compulsory in England for property management work. If money is still withheld, recovery is generally a court claim brought by the company: the First-tier Tribunal’s service charge jurisdiction is about whether charges are reasonable and payable, not about recovering funds from a former agent.
Can Leaseholders Force a Change If the Freeholder Appoints the Agent?
Not directly. A recognised tenants’ association can require consultation about the appointment or employment of a managing agent under section 30B of the Landlord and Tenant Act 1985, but that is a right to make observations and have them considered, not a veto. The routes that change who manages are claiming the right to manage, buying the freehold, or applying to the First-tier Tribunal under section 24 of the Landlord and Tenant Act 1987 for the appointment of a manager.
Does a Block Management Agent Have to Belong to a Redress Scheme?
Yes, in England. Article 5 of the Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014 requires a person who engages in property management work to be a member of an approved redress scheme, and article 8 allows an enforcement authority to impose a monetary penalty of up to £5,000 for breach. Ask for the scheme name and membership number, and verify it before you sign.
Sources: Landlord and Tenant Act 1985, section 20ZA, section 30B, Service Charges (Consultation Requirements) (England) Regulations 2003, Schedule 1, Landlord and Tenant Act 1987, section 24, section 48, Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, article 5, Corvan (Properties) Ltd v Abdel-Mahmoud [2018] EWCA Civ 1102, Regulatory Reform (Fire Safety) Order 2005, article 9.
Sources
Everything above is taken from these, not from a summary of them:
- Landlord and Tenant Act 1985, section 20ZA legislation.gov.uk
- Landlord and Tenant Act 1985, section 20 legislation.gov.uk
- Landlord and Tenant Act 1985, section 30 legislation.gov.uk
- Landlord and Tenant Act 1985, section 30B legislation.gov.uk
- Landlord and Tenant Act 1985, section 29 legislation.gov.uk
- Service Charges (Consultation Requirements) (England) Regulations 2003, Schedule 1 legislation.gov.uk
- Service Charges (Consultation Requirements) (England) Regulations 2003, regulation 2 legislation.gov.uk
- Service Charges (Consultation Requirements) (England) Regulations 2003, regulation 3 legislation.gov.uk
- Service Charges (Consultation Requirements) (England) Regulations 2003, regulation 4 legislation.gov.uk
- Corvan (Properties) Ltd v Abdel-Mahmoud [2018] EWCA Civ 1102 The National Archives, Find Case Law
- Landlord and Tenant Act 1987, section 24 legislation.gov.uk
- Landlord and Tenant Act 1987, section 48 legislation.gov.uk
- Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, article 5 legislation.gov.uk
- Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, article 8 legislation.gov.uk
- Leasehold Reform, Housing and Urban Development Act 1993, section 87 legislation.gov.uk
- Commonhold and Leasehold Reform Act 2002, section 94 legislation.gov.uk
- Regulatory Reform (Fire Safety) Order 2005, article 9 legislation.gov.uk
- Construction (Design and Management) Regulations 2015, regulation 4 legislation.gov.uk
- Construction (Design and Management) Regulations 2015, regulation 12 legislation.gov.uk
- Enterprise and Regulatory Reform Act 2013, section 84 legislation.gov.uk
- Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014, article 6 legislation.gov.uk
- Service Charges (Consultation Requirements) (England) Regulations 2003, Schedule 1 paragraph 8 legislation.gov.uk
Spotted something wrong, or something that has moved on? Email move@