The quality of block management has a direct and measurable impact on the value of leasehold residential property. A well-managed building is better maintained, has lower service charge surprises, and is more attractive to buyers and tenants than an equivalent building that has been poorly managed. Yet the decision about which managing agent to appoint is frequently made on the basis of price alone, with predictable consequences for service quality.

The following covers how to evaluate residential managing agents in London and what to look for before making an appointment.

• Management fee is one of the least important factors in choosing a managing agent — the real cost is in poor maintenance decisions, section 20 errors, and service charge disputes
• ARMA accreditation provides a degree of quality assurance, but it is not a guarantee of competence — ask for specific references from comparable developments
• The most reliable indicator of management quality is the financial clarity and accuracy of the service charge accounts

What the management fee does and does not cover

A standard residential block management fee typically covers the core administrative management of the building: service charge collection and accounting, routine maintenance coordination, AGM management, leaseholder communications, and compliance oversight. It does not typically include major works project management, out-of-hours emergency response beyond a defined level, or legal costs associated with leaseholder disputes or section 20 consultations.

Before appointing a managing agent, request a full fee schedule that clearly sets out what is and is not included in the headline management fee. Hidden charges for routine services are a common source of dispute and should be identified and negotiated before any management agreement is signed.

• Request a full written fee schedule covering all chargeable services, not just the headline management fee
• Ask specifically whether major works project management is included or charged separately, and if separately, on what basis
• Clarify the notice period for terminating the management agreement — industry standard is three months, but some agreements include significantly longer notice periods

References and comparable experience

The most valuable due diligence a freeholder or residents' management company can undertake is speaking directly to existing clients of the managing agents under consideration. Ask for three references from developments of comparable size and specification to your own building, and contact those references directly. Ask specifically about the quality of the financial reporting, the responsiveness of the maintenance team, and how the agent handles section 20 major works.

• Request references from at least three comparable developments currently under management by the agent
• Ask references specifically about section 20 experience and how the agent handled any major works projects
• Review the agent's approach to leaseholder disputes — ask whether they have an in-house legal team or rely on external solicitors for contentious matters

"The right managing agent is not the cheapest one. It is the one whose existing clients are genuinely satisfied and whose service charge accounts tell a clear, accurate financial story. Those are the two tests that matter most."