Service Levels Agreements for a New Block Management Contract

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Service Levels Agreements for a New Block Management Contract



How can you be sure that your managing agent is delivering the right types and levels of service?

Your best approach is to check that they have the right experience for your building and that you have agreed on Service Level Agreements (SLAs) in your contract. These are an upfront set of standards that your new managing agent has to meet in order to justify their fees and continue their contract.

Leaseholders are increasingly looking for help with specific problems when they switch managing agent and many more are looking for a way to improve their current services. The above graphic shows the increasing portion of our new customers that approach us looking for help with a specific service (for example, improving building maintenance or improving financial management).

By including SLAs in a new contract, all parties can be sure of what needs to be delivered in order to continue the relationship.

You won’t be able to cover every type of service that your managing agent performs however, you should make sure that these focus on the main problems that affect your building.

In addition, although many block managers charge flat fees, you should be willing to pay for better services if they are needed – for example, a visit to a block and thorough inspection can take multiple hours per visit. If having an inspection every month will help to improve your building, then you should be willing to pay to receive improved service.

The SLAs listed below would be appropriate for most buildings we have worked with – if instead, you are completing a large external works project or have some large legal issues these should be expanded on.

Once these are settled between your RTM board and leaseholders, you should send these to your current or new managing agent to understand if: a) they are possible to deliver, b) there will be additional costs, c) once agreed, what happens if they are not met




Which general SLAs should be in a block management contract

There are some universal SLAs that the vast majority of buildings should set - some of these are listed below.

Enforcement of Lease and Building Regulations
The managing agent will agree to uphold and enforce all parts of a lease or share of freehold agreement unless:
  • They contradict current UK and local borough laws, regulations and statues
  • An agreement is made with the Leaseholder or Share of Freehold committee to disregard or alter these
Financial transparancy
The managing agent makes a quarterly statement of each account available and ensures yearly statements of all accounts are delivered to the building directors
Reporting
The managing agent produces a budget in time for the beginning of the financial year cover the next year
Customer service
The managing agent ensures that all complaints, issues and points raised over email, telephone and mail are acknowledged within 24 hours and assigned for resolution
Maintenance and inspections
Inspection reports will be circulated with building directors along with recommendations on mitigating actions
Procurement processes and quotes
The individual property manager from the managing agent will be responsible for judging if an invoice to pay is correct – for the right service, for the right amount and for the right building
The managing agent will ensure that all quotes obtained should be judged of reasonable costs by the property manager, who will be responsible for justifying these quotes
The managing agent will ensure that no commissions or kick-backs will be paid to the managing agents from any contractors working for the property without this being fully disclosed to the customer
The managing agent will ensure that all suppliers complete a due diligence process before working on the building – for example they hold the required insurance cover for activites they are contracted to complete
Break clauses and contract termination
The managing agent will ensure that upon the contract being terminated, all monies must be transferred to the new agent upon instructions, within 30 days
The managing agent will incur a daily penalty – to be agreed by the customer if this is not the case



Specific SLAs for your building

A great deal of detail can be put into devising and agreeing to a set of SLAs for a building, based on the leaseholder's specific requirements. This is particularly true for older buildings or larger estates that may require specialist care.

Below we have listed some options for common activities, relevant to most buildings.

Financial transparancy
How often full statements of account should be provided
For building that have experienced financial difficulties and require close monitoring Weekly
For larger buildings where the costs could spiral out of control Quarterly
For smaller buildings with small budgets Yearly
Reporting
How often formal reports reconciling all incomes and costs should be made to the RTM board from the managing agent
For buildings that have experienced financial difficulties and require close monitoring Monthly
For larger buildings where the costs could spiral out of control Quarterly
For smaller buildings with small budgets Every 6 months
Inspections
How often managing agents should make a detailed review of the building
For buildings with new management or have suffered from historically poor maintenance and are implementing improvements Monthly
For buildings without permanent staff which need detailed inspection across large communal areas Quarterly
For buildings with active leaseholders (who are able to report issues) and with easy visibility Yearly
Staff management
How closely the on-site building staff should be managed and how often instructions provided
Close management of staff (e.g., completing the payroll and HR compliance tasks and providing weekly instructions) Weekly
Medium management of staff (e.g., completing the payroll and HR compliance tasks and tracking monthly activities) Monthly
Light management of staff (e.g., completing the payroll and HR compliance tasks and completing quarterly reviews) Quarterly
Minimum discretionary spend
The amount of money that the managing agent can spend on building necessities without asking permission of the RTM Directors. The legal maximum is £250 per flat and the lower the threshold the more time the managing agent will spend on reviewing spending decisions with the RTM Directors
Maximum £250
Medium £100
Zero – all spending decisions are made by the RTM board £0
Tenant management and licencing
How closely each tenant moving in and out of each flat should be monitored
Complete a full register which is checked on a monthly basis -
Optional licencing scheme for leaseholders which is NOT legally enforced -
No licencing and tenant monitoring -
Leaseholder updates and communications
The regularity of building communications to the leaseholders – these are often required more frequently when the building in investing in improvements
Monthly updates showing the frequent building changes -
Quarterly updates detailing the changes to the building -
Single updates once a year at an Annual General Meeting (AGM) -
Cleaning
The regularity of basic cleaning of the internal areas
For large and busy buildings with a large amount of footfall Daily
For buildings with a low use of communal areas Weekly
For building with their own cleaning staff or which do not require cleaning None
Gardening
The expertise required to design and maintain the garden and outside areas
Yearly landscaping reviews and very regular tending Weekly
Basic maintenance for none-complex garden Monthly
Tidying of artificial grass, hanging baskets etc Quarterly
Care of specialist buildings and estates
Expert reviews and recommendations to maintain old buildings and estates built using specialist materials
For buildings where a large part of their value is dependent on maintaining specialist materials Quarterly
For older buildings with problems such as erosions, water ingress Yearly







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