Buying freehold. Should we manage ourselves or get a managing agent?

[coconutfeet]

We are 3 flats who have an absentee landlord - basically the ground rent hasn't been collected for at least 15 years. So far we've managed by sharing costs to the joint areas and generally being reasonable, but we all agree that it's time to formalise things. We are looking into the costs of buying the freehold between us (a fairly straightforward procedure in our case, I believe).

So now, we're thinking about the practicalities and I'm interested to hear about people's experiences, good and bad, from people who have either managed the company themselves or employed a managing agent to do it for us. Which would you advise, based on you experiences?

I used to run my own small business so am reasonably familiary with the basics of running a company but I don't have a huge amount of spare time.

I'm also going to post this in property, so sorry for any repetition.

We manage the freehold company ourselves, between four flats. It is very easy. I certainly wouldn't bother with a managing agent. Each flat takes a turn every year or two as the Company Secretary, then they have to sort out the insurance and a few items of maintenance. They also have to work out the service charge and make sure it is paid, either as a one-off or in instalments. Then you need an AGM with minutes, and an accountant to help with the return to Companies House. The only way I could imagine it being complicated is if you had "difficult" neighbours eg. who wouldn't pay their service charge. Also, setting up the bank account is weirdly complicated. But once it's done, it's done.
Good luck.

Thanks for that frigatebird.

Out of interest, do you have anything in the contract that stipulates what would happen if the company secretary didn't do the necessary bits and pieces? I'm imagining being landed with a huge fine because someone didn't submit the accounts on time or didn't renew the insurance.

One of the flat owners lives abroad and although lovely, he can be bit lax about things.

I agree with frigatebird. Much better to do it yourself unless you have very difficult neighbours.
You save, money, because no one is taking a cut, and also, you have more flexibility - for example, where I live we use someone local to clean the common areas once a week, and also a local gardener who does lots of gardens in our street. If we used a managing agent, then I think all services would be provided by service companies, who would charge a lot more and probably not do such a good job.

Hello coconut.

I don't think we have a contract. I think it's all in the Articles of Association of the freehold company. I have just turned around and asked DH (currently Company Secretary) and he says, "I dunno, I haven't read them, I think they're in a big box somewhere".

Yes the Company Secretary does need to be organised, but there are only two real biggies (insurance and submission of accts) and both of them only come round once a year. If you're organised, then make yourself the first Company Secretary for two years, then you'll have things on an even keel with planned timetable of annual tasks etc. then you can handover to the other neighbour maybe in two years time.

Also, if one of the flat owners lives abroad then maybe he wouldn't want to be Company Secretary anyway TBH. It's better if it's someone who actually lives there. Then they actually spot when the front gate needs mending etc. etc. They also might need to be around to let in tradespeople, sign cheques etc.

Incidentally, we save money because we don't have a cleaner to do the common areas. I do it myself. It takes about fifteen minutes a week. Although I like to complain, previously we were all paying hundreds for it! It's things like this which really save money, and which mean you can have your communal areas just the way you want them.

I borrowed this book from the local library too. Can't remember how much it had in it about managing your own Freehold Company but it was definitely useful either way.

Buying Freehold

Frigatebird - thanks for all this. Funnily emough, we've ordered that book from Amazon. It looks pretty useful.

I'm happy to deal with the paperwork initially. I'd feel much happier doing it myself than leaving it to one of the others (control freak!).