Questions to Ask a Managing Agent Before Appointing

Ask questions that produce documents. Every agent describes itself as proactive and transparent, so the useful questions are the ones answered only by a certificate, a redacted management agreement, a sample set of accounts or a named person’s diary. Below are the questions worth putting to a managing agent before you appoint one, the answers to listen for, and the law behind each. This is England: several rules differ in Wales, and the government’s current implementation programme is England only.

First Check Whether Appointing the Agent Triggers Section 20

This is the question directors most often miss. A qualifying long term agreement is defined in section 20ZA(2) of the Landlord and Tenant Act 1985 as an agreement entered into by or on behalf of the landlord or a superior landlord for a term of more than twelve months. Regulation 4 of the Service Charges (Consultation Requirements) (England) Regulations 2003 supplies the money trigger: section 20 applies where the relevant contribution of any tenant, in an accounting period, would be more than £100. A three-year management contract at £220 per flat must therefore be consulted on before you sign it.

Schedule 1 requires a notice of intention to every leaseholder and to any recognised tenants’ association, stating your reasons, inviting written observations and inviting leaseholders to nominate a firm you should approach for an estimate. The period for both is 30 days. Your proposal must then disclose any connection between the landlord and the proposed contracting party. Skip the process and each leaseholder’s contribution is capped at £100 for that period unless the First-tier Tribunal dispenses with the requirements under section 20ZA(1).

Do not assume this is someone else’s problem because you are resident-led. Section 30 defines “landlord” for the service charge provisions as including any person who has a right to enforce payment of a service charge, so a resident management company or an RTM company is within it. In practice you either appoint for twelve months or less, which is why many agents offer exactly that, or you consult properly and get a longer contract. Ask which the agent proposes.

Section 30B separately lets a recognised tenants’ association require consultation on the appointment or employment of a managing agent, giving not less than one month for observations and a fresh notice at least once every five years.

Fees: What the Number Covers and What Sits Outside It

Ask for the fee per unit per year, inclusive of VAT, then ask for a written list of everything not in it. The second list is where the money is: company secretarial work, a project fee for supervising major works (often a percentage of contract value), insurance handling, sales and remortgage packs, licence to alter administration, arrears recovery and out-of-hours attendance. Our note on what a management fee should cover sets out the usual split.

Then three follow-ups. Is the fee index-linked or fixed, and to what? When is the first review and what notice do you get? And who pays for the agent’s time at the tribunal, the company or the service charge, under which clause of the lease?

Whatever is agreed must still survive section 19 of the 1985 Act, which allows costs into a service charge only to the extent they are reasonably incurred and, for services or works, only if of a reasonable standard. Any leaseholder can apply to the First-tier Tribunal under section 27A for a determination of whether a charge is payable and in what amount.

Commissions: Ask for Every Source of Income, Not Just the Fee

The question is blunt: apart from the management fee, what income will your firm or any connected company receive in connection with this building, from any source? Get it in writing and get it repeated in the management agreement.

Insurance is where this matters most. In its September 2023 policy statement on multi-occupancy building insurance, the Financial Conduct Authority reported commissions of up to 62 per cent being paid to brokers in some cases, and singled out commission shared onwards with freeholders and their property managing agents. The rules came into force on 31 December 2023. They bring leaseholders within certain rules as customers and policy stakeholders, and require disclosure of what an authorised intermediary receives, what it pays to others including unregulated managing agents and freeholders, conflicts such as ownership links to the insurer, and how many alternative quotes were obtained.

Two limits matter. The FCA rules do not cap or ban commission, and many managing agents are not FCA authorised, so the duty falls on the insurer and broker rather than the agent. Ask the agent directly, and ask to see the disclosure a broker produced for a comparable building. Ask the same about contractors: rebates, referral fees, retained volume discounts, any ownership interest in a maintenance or cleaning firm. An agent who takes no commission on contractor invoices will say so in one sentence and put it in the contract.

Client Money: Where It Sits, Whose Name Is on It, Who Protects It

Section 42 of the Landlord and Tenant Act 1987 puts service charge contributions on trust: the payee holds them as a single fund or, where appropriate, in separate funds, to meet the costs they were levied for. Section 42A, which would require that money to sit in a designated account and give leaseholders a right to inspect evidence of compliance, is recorded on legislation.gov.uk as commenced for specified purposes only and otherwise prospective. The designated account duty is therefore not something you can rely on. Ask for it as a contractual term instead.

Is there one account per managed property, or is our money pooled with other clients? Which bank, and is it authorised by the Financial Conduct Authority? Whose name is on the account? Who receives the interest? Will you give us read-only access or a statement on demand?

Then client money protection. GOV.UK states that letting and property management agents in England holding clients’ money must join a client money protection scheme, that the fine for not joining can reach £30,000, and that a further £5,000 applies for failing to display or produce the certificate. The approved schemes are Client Money Protect, Money Shield, Propertymark, RICS, Safeagent and UKALA Client Money Protection. Regulation 3(2) of the 2019 Regulations adds the part people forget: cover must be no less than the maximum client money the agent may hold from time to time. Ask for the certificate and how that limit maps onto your service charge funds.

One honest caveat. GOV.UK frames that duty around the private rented sector, while the underlying definition in section 55 of the Housing and Planning Act 2016, picked up by the 2019 Regulations, is work on premises consisting of housing in England let under a tenancy. Rather than argue about scope, ask whether the agent holds cover and for how much.

Staffing: Who Will Actually Manage the Building

There is no statutory staffing ratio for managing agents in England, and any figure quoted at you is a trade body target rather than law. Ask about the specific case instead.

• Who is the named property manager for this building, and can we meet them rather than the business development contact?
• How many buildings and how many units does that person hold today?
• Who covers holiday and sickness, and how is the handover done?
• How often will someone attend site, what do they record, and do we see the report?
• Is the out-of-hours line answered by your own staff or an outsourced call centre, and who decides whether to send a contractor at 2am?
• How many property managers left the firm in the past year?

On qualifications, be accurate about where things stand. The government consulted between 4 July and 26 September 2025 on mandatory qualifications for managing agents, and in its response of 15 July 2026 said it would respond separately on that in due course. There is no mandatory qualification in force in England today, so voluntary qualifications and firm-level certification are what you can actually test. Our note on where managing agent regulation stands tracks the position as it moves.

Reporting and Accounts, and What Changes From 2027

Start with the statutory floor, which an agent should describe without hesitating. Section 21 of the 1985 Act, as it remains in force, lets a leaseholder require a written summary of relevant costs within one month of the request or six months of the period end, whichever is later, and where the charges are payable by tenants of more than four dwellings that summary must be certified by a qualified accountant. Section 22 then gives a right, within six months of obtaining that summary, to inspect the supporting accounts and receipts free of charge for two months beginning not later than one month after the request.

Two more should get a mention. Section 20B makes costs incurred more than 18 months before a demand irrecoverable unless the leaseholder was told in writing within those 18 months that the costs had been incurred and would be charged. Section 21B requires every demand to be accompanied by the prescribed summary of rights and obligations, and lets a leaseholder withhold payment if it is not. Our piece on what makes a service charge demand valid covers the rest of the paperwork.

Then ask how the firm is preparing for what is coming. On 15 July 2026 the government published its response on implementing Part 4 of the Leasehold and Freehold Reform Act 2024 in England. It confirmed an annual report on the health and condition of the building, a standardised demand form accompanied by a budget compared against the previous period, a prescribed future demand notice, a prescribed administration charge schedule, new insurance transparency requirements, standardised accounts with ISRS 4400 as the default reporting standard and ISA 800 where the lease requires an audit, and a right to request information going back six years.

Timing shapes the answer. Private landlords are to get 12 months’ notice of most measures and social landlords 24 months, and the government says leaseholders will start to see changes during 2027. Sections 55 to 57 of the 2024 Act will in due course remove sections 21 to 24 of the 1985 Act, including the section 21 summary and the section 22 inspection right, and replace them with new sections 21C to 21H. See our summary of the service charge reforms due in 2027.

If the agent will also act as company secretary, ask how they handle Companies House. Annual accounts are due nine months after the financial year end, a confirmation statement at least once a year, and since identity verification became a legal requirement on 18 November 2025 Companies House will not accept a confirmation statement until every director has verified their identity and supplied a personal code.

Compliance: Ask for Evidence, Not Assurances

The most revealing request of the whole interview: show us a redacted compliance register for a live client of similar size. A firm that manages properly has one ready. A firm that does not offers a policy document instead.

What you want is one schedule per building, naming each duty, when it was last discharged, when it is next due, who did it and where the certificate lives: the fire risk assessment with an action list showing dates closed rather than dates raised, fire door inspection records, the legionella risk assessment and monitoring log, the communal fixed wiring inspection, lift examination records, the asbestos survey and management plan, and smoke ventilation servicing. Our overview of compliance in a managed block lists the usual duties.

Ask who chases open actions, how the agent escalates when a contractor does not turn up, and how building safety duties are allocated for your building. Then ask what happens when the compliance schedule and the budget disagree. That conversation is the real test of an agent’s independence.

Redress, Complaints and How You Would Leave

Redress scheme membership is a legal requirement, not a badge. 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 anyone engaging in property management work to belong to an approved scheme, and article 8 lets an enforcement authority impose a penalty of up to £5,000 for failing to do so. Section 84 of the Enterprise and Regulatory Reform Act 2013 defines that work by reference to premises including a dwelling-house let under a relevant tenancy, which expressly includes a long lease, and government guidance confirms that agents managing leasehold blocks are covered.

Two exclusions catch people out. Article 6 puts commonhold managers outside the definition, and also excludes an RTM company exercising the right to manage under Part 2 of the Commonhold and Leasehold Reform Act 2002. So an RTM company managing its own building need not join a scheme, but the agent it appoints must. Ask which of the two approved schemes the agent belongs to, then ask for the membership number and check it.

The follow-up is better than the first question. How many complaints did your firm take to the ombudsman in the past twelve months, how many were upheld, and what changed as a result? Ask to see the written complaints procedure and the point at which a complaint reaches a director.

Finally, ask how you would leave. What notice does the agreement require, from each side? On termination, what is handed over, in what format and by when: accounts, bank balances, the compliance register, contractor warranties, keys, portal data, the statutory books. What is charged for that handover? Agree the exit terms while everyone is still being charming, and work from a handover checklist so nothing is left behind.

Before you interview anyone, do two things: write down what your lease obliges the company to do, because that is the specification you are buying against, and agree with your fellow directors what you will not accept, for example commission on contractor invoices or pooled client money. Plymouth Block Management is ISO 9001:2015 certified (BSI certificate FS 685565) and a member of The Property Ombudsman, holds client money in named Lloyds accounts, one per managed property, with interest retained by the client, and charges a fixed fee agreed in advance with no commission on contractor invoices. If you want to talk through the tender rather than hear a pitch, ask for a property manager.

Common Questions

The points directors raise most often when running a tender for the first time.