How leasehold properties are managed

If you own a leasehold flat, your landlord (freeholder) will normally be responsible for managing the building. Your landlord might be a person or a company, or an organisation such as a local authority or housing association.

If your landlord is responsible for management, they will either:

• manage the building themselves
• use a managing agent – a professional person or company that is employed to manage the building

If they use a managing agent, the landlord is still responsible for making sure the agent meets their responsibilities and the building is properly managed.

Some buildings have arrangements where leaseholders are involved in managing the building themselves, through a company.

The company delivers services on behalf of the landlord under the terms of the lease. The leaseholders are usually shareholders of the company.

The main types are:

• right to manage companies, which are set up with rights under the law, and run by leaseholders to take over management from the landlord
• freehold management companies, where the leaseholders have collectively bought the freehold and manage the building themselves
• residents’ management companies, which are usually set up by developers to manage new build flats as part of a handover agreement or with arrangements written into the lease

The company might manage the building itself or use a managing agent.

Usually some of the leaseholders will be directors of the company, and will lead on management.

The rules for how the company is to be run will be set out in a legal document called the articles of association.

Management responsibilities depend on what the lease says. Usually, they include things like:

• day-to-day maintenance, cleaning and repairs for common parts of the building
• regular planned maintenance, such as redecorating
• budgeting, billing and collecting service charges
• arranging buildings insurance
• collecting ground rent
• meeting legal requirements such as building safety
• enforcing the terms of leases

The person or company that manages your building should follow a government-approved code of practice. There are 2 codes:

• the Service Charge Residential Management Code, published by the Royal Institution of Chartered Surveyors (RICS)
• the Private Retirement Housing Code of Practice, published by the Association of Retirement Housing Managers (ARHM) – for retirement housing

These codes do not apply if your landlord is a local authority or non-profit registered provider of social housing.

If your managing agent is a member of The Property Institute (TPI), they will be regulated by TPI and must follow its code of conduct.

All managing agents must belong to a government-approved redress scheme for resolving complaints.

As a leaseholder, you’re responsible for paying your share of the costs of managing the building through your service charge.

You might also need to pay an administration charge for management work if you ask for a service connected with buying, selling or use of the property, such as approval for renting out your flat, or providing you with information and documents.

Find out more about:

• service charges
• administration charges