Managing Leaseholders – A guide for RMC directors

First of all, I commend you for sticking your head above the parapet and becoming an RMC director. It’s often a thankless task, voluntary, unpaid (in most cases) and often under-appreciated.

As a managing agent, many an email has started with the words “what are the directors doing about it?”. These words are often capitalised, which in my experience conveys either tremendously dubious business opportunities from gentlemen or women in faraway countries, or anger. The number of exclamation marks used after this statement can often be used as a measure of that anger.

So, you’ve taken on an unpaid job and people are shouting at you. How do you cope? These are Common Ground’s top tips for dealing with leaseholders

1. Use your managing agent for advice on managing leaseholders and the issues they raise

At Common Ground, I tell my property managers that the buildings are an irrelevance, it’s the people we are really managing. Whilst that is a slight exaggeration, ultimately, the buildings are static objects, but the people are not. Everyone has different expectations, temperament, reasonableness, problems etc. Ultimately, for most, their property is their biggest and most expensive asset, so it is emotive.

Us managing agents do this professionally day in, day out so please ask your managing agent for advice. Leasehold is poorly understood and advice from a managing agent can often difuse situations before they escalate.

2. Be honest and transparent

Problems do arise but we always recommend sharing such information sooner rather than later. The single most emotive issue is increases in service charges OR the requirement to do a one-off supplementary charge. Leaseholder apathy is a challenge for all in property management but this can usually be overcome by asking them for money!!

Be honest, be upfront, but also be firm. Outraged leaseholders may often tempt directors to “kick the can down the road” rather than dealing with problems head on but ultimately, as directors, the liability rests with you. Always bear this in mind when making decisions.

3. How to stand your ground

Okay, easier said than done with shouty people but the following tips should assist.

• Try to stay calm and measured. Credibility is often lost with emotional outbursts, and it can cause others to become overly emotional too.
• Point out that, as directors, you have legal responsibilities and can be held personally liable for decisions made.
• Point out that the position is voluntary and (usually) unpaid.

Finally, and this work well at General Meeting’s

• Invite “vocal” leaseholders to become directors. People are often happy to make decisions that they cannot be held accountable for. It’s easy to be noisy and opinionated when you’re not accountable. In our experience, most leaseholders back off when asked to stand up and be accountable, but those that do accept the challange often become very good directors.