FIRING
A MANAGING AGENT
It may seem odd that a management company should offer advice
on how to dismiss a managing agent. However, it would seem that
committees can find such an experience disturbing – even
harrowing. This article is simply a well intentioned effort
to offer some practical advice that will hopefully reduce the
anguish for all concerned.
Firstly be sure that you really do want to fire your agent.
Are they really guilty of serious misdemeanors or are you simply
taking for granted their strong points and focusing on possibly
lesser important areas of weakness?
This is not to say that the areas of weakness should not be
drawn to the agent's attention and rectification sought. And
this is an important point: if you are unhappy with aspects
of your agent's performance then tell them! Tell them firmly,
tell them what standards they must achieve to overcome the weaknesses
and set a deadline for the improvements. Confirm all this in
writing. If the standards are not met then seriously consider
firing them.
It may be that the terms of the contract require you give them
a period of notice – six months is not unusual. In this
case it might be advisable to give notice of dismissal with
the request for improvement to be achieved by the end of three
months when the notice can then be withdrawn. If the improvement
is not forthcoming then you are already half way through the
notice period.
What are the issues that would prompt you to change managing
agents? The most obvious is poor handling of finances: poor
budgeting, poor credit control, poor cash flow management, inadequate
accounting and reporting procedures. Also not paying suppliers
bills and endangering the standards of the building. Any of
these are reason enough – money is important. The second
is poor administration of the building: inadequate and slow
repairs and maintenance, poor staff performance, inadequate
attention to insurance matters and the terms of maintenance
contracts. Frequently bad financial management leads to poor
management of the building. Lastly, poor communication only
makes matters worse.
The performance of the manager responsible for your property
is also important. Unless the individual gives the attention
that is required then standards slip no matter the size of their
company. A short sharp reminder to the individual and his senior
management should bring about an improvement – or it is
time to change agents. It may be that a larger management company
has a long list of properties and does not rate you as particularly
important – another good reason to make a change. The
most important point of all is that once a committee has decided
that the required improvements are not forth coming then they
have a duty of care to change agents. All too often human nature
results in committees hanging on hoping that the agent will
improve as they really dislike the thought of dismissing them.
This is not responsible committee work. If an agent is not performing,
has had the poor aspects of their performance drawn to their
attention, been fairly warned and not adequately improved –
then fire them. Do it within the terms of your contract, do
it fairly, do it humanely – but do it!
CHOOSING A NEW MANAGING AGENT
Having bitten the bullet and decided to fire your managing agent
how do you go about selecting a new one? Most committees choose
the route of interviewing a number of agents and then choosing
the best. But how do you select the short list and on what basis
do you judge who is best? We respectfully suggest that most
selection procedures we have witnessed leave a lot to be desired.
The best way to identify potential agents is to speak with other
buildings personnel and find those who are happy with their
current agents. Also talk with your local council who may have
ideas on who they regard as the best operators. You could also
try organizations such as the Federation of Private Residents’
Associations. You could also invite us to talk with you: our
contacts are at the foot of this page.
Having selected the short list then give them each exactly the
same brief. When calling them to a meeting make it clear what
is on the agenda and who will be attending the meeting. This
should also ensure that the agent is well prepared and you can
get to know each other in the shortest possible time. Consider
what is important to you and compile a formal list of questions
(why not send it to all candidates before the meeting). It is
also important that if a sub-committee is doing the interviewing
the members are people with some experience of business management
and can distinguish between experienced professionals and those
who simply have a persuasive tongue.
Importantly ask for and follow up references. Any agent will
present themselves in the most favourable light so it is important
to speak with committee members of property they already manage
to hear their opinions.
Should you choose managing agents from large companies or small?
We suggest there is no hard and fast rule. The best for you
is where the people responsible for your building have the relevant
experience and will give you, your building, and your finances,
the closest attention. This may well be a smaller company staffed
by experienced managers who once worked for large companies.
This could be the best of both worlds as you can have “rounded”
business managers but fees which reflect the lower overheads
of a small tightly run organisation.
Who
are JP MANAGEMENT?
JP Management are managing agents. We work closely with
leaseholder/tenant committees as we appreciate they wish to
exercise control over their management. We are supportive of
those who have acquired, or wish to acquire, their freehold
or the Right to Manage and can help on procedures and financing
arrangements.
