Block Management Handover Guide: Changing Agents
A comprehensive guide to the block management handover process when changing managing agents. Covers the legal framework, the handover timeline, essential document transfer, financial handover of service charge funds and reserve funds, resident communication, and how to ensure continuity of service throughout the transition.
What Is a Block Management Handover?
A block management handover is the formal process of transferring the management of a residential building from one managing agent to another. This involves the transfer of all records, financial accounts, contractor relationships, insurance policies, and day-to-day management responsibilities. A well-executed handover ensures that the building continues to be properly managed and that residents experience minimal disruption during the transition between agents.
The handover can be triggered by a freeholder decision, the exercise of the Right to Manage by leaseholders, the expiry of an existing management contract, or dissatisfaction with the current agent's performance. Regardless of the trigger, the handover must be carried out professionally to protect the building and its residents.
This guide explains every stage of the block management handover, from the initial decision to change agents through to the post-handover settling-in period. For guidance on choosing your new agent, see our guide to switching managing agents.
What Triggers a Management Handover?
A block management handover can be initiated for a number of reasons. Understanding the most common triggers helps directors and leaseholders plan ahead and manage the transition effectively.
Right to Manage (RTM)
The Right to Manage allows qualifying leaseholders to take over the management of their building without having to prove fault on the part of the existing manager. Once an RTM company has been established and the statutory process completed, the management functions transfer from the freeholder or their appointed agent to the RTM company. This is one of the most common triggers for a block management handover and requires careful coordination to ensure the incoming agent has everything they need from day one.
Freeholder or RMC Decision
A freeholder or residents' management company may decide to change managing agents because they are dissatisfied with the current agent's performance, fees, or communication. Poor managing agent duties compliance, failure to carry out maintenance, or inadequate financial reporting can all prompt a decision to appoint a new agent.
Contract Expiry or Termination
Management agreements typically have a fixed term with notice provisions for termination. When a management contract expires or is terminated in accordance with its terms, a handover must take place. It is important to review the contract terms carefully before serving notice to ensure the correct procedure is followed and to avoid any claim for wrongful termination.
Legal Framework for a Block Management Handover
The block management handover process is governed by professional standards, contractual obligations, and statutory requirements. While there is no single Act of Parliament that prescribes every step, several important codes apply.
RICS Service Charge Residential Management Code
The RICS Code sets out best practice for the management of residential service charges and includes specific guidance on handover procedures. It requires managing agents to cooperate with the handover process, transfer all records and client money promptly, and ensure that there is no gap in management coverage. Agents who are members of RICS are bound by the Code, and failure to comply can result in disciplinary action.
The Property Institute (TPI) Standards
The Property Institute, formerly ARMA and IRPM, publishes standards and guidance for managing agents that include handover protocols. TPI standards emphasise the importance of protecting client money during a transition, maintaining transparency with leaseholders, and ensuring that all statutory and contractual obligations continue to be met during the handover period.
Management Agreement Terms
The terms of the existing management agreement will set out the notice period required, the obligations of the outgoing agent on termination, and any provisions relating to the return of documents and client money. It is essential to review these terms before initiating a handover to ensure that the correct procedure is followed.
Handover Timeline and Key Milestones
A structured handover timeline is essential for ensuring nothing is missed. The following milestones provide a framework for a typical block management handover.
Weeks 1-2: Formal Notification and Planning
Serve formal notice on the outgoing agent in accordance with the management agreement. Appoint the incoming agent and agree the handover plan. Notify the buildings insurer of the forthcoming change. Begin compiling a list of all documents, records, and information that must be transferred.
Weeks 3-4: Financial Reconciliation and Document Transfer
The outgoing agent prepares a full financial reconciliation of all client money accounts, including the service charge account, reserve fund, and any other client money held. Documents begin to be transferred to the incoming agent, including leases, insurance policies, health and safety files, contractor agreements, and correspondence records.
Weeks 5-6: Contractor and Service Continuity
Contact all contractors and service providers to confirm the change and ensure continuity of service. Novate or reassign existing contracts where required. Confirm that the buildings insurance policy has been updated. Transfer keys, access codes, and security system credentials to the incoming agent. Ensure emergency contact procedures are in place.
Weeks 7-8: Resident Communication and Go-Live
Issue formal resident communication confirming the change of agent, providing the new agent's contact details, and instructing residents to redirect service charge payments. The incoming agent takes over day-to-day management. Transfer of client money is completed and confirmed in writing. A formal handover meeting is held to confirm all items have been transferred.
Essential Documents to Be Transferred
The document transfer is one of the most critical elements of a block management handover. Without complete records, the incoming agent cannot effectively manage the building.
- Lease agreements for every unit, including any deed of variations
- Current buildings insurance policy, schedule, claims history, and broker details
- Service charge accounts, budgets, and certified accounts for at least three years
- Reserve fund or sinking fund statements with current balance and contribution schedule
- Health and safety records: fire risk assessments, asbestos surveys, legionella assessments
- Contractor agreements, warranties, and contact details for all service providers
- Section 20 consultation records for major works carried out or planned
- Minutes of AGMs, board meetings, and extraordinary general meetings
- Resident contact details, correspondence files, and complaint records
- Key holder register, access codes, fob details, and security system documentation
- Utility account details, meter readings, and supplier contracts
The incoming agent should use a detailed handover checklist to verify that every document has been received. Any gaps should be flagged immediately with the outgoing agent so they can be resolved before the formal handover date.
Financial Handover: Client Money, Service Charges, and Reserve Funds
The financial handover is often the most sensitive part of the process. All client money must be reconciled and transferred to the incoming agent's designated client account, including the service charge fund, reserve funds, and any other money held on behalf of the leaseholders.
Client Money Reconciliation
The outgoing agent must provide a full reconciliation of all client money accounts, showing the opening balance, all income received, all expenditure incurred, and the closing balance to be transferred. This should be supported by bank statements and agreed between both agents before funds move.
Service Charge Arrears
A detailed schedule of all outstanding service charge arrears must be provided, showing the amount owed by each leaseholder, the period to which the arrears relate, and any payment plans or legal proceedings in progress. The incoming agent needs this to continue arrears recovery without delay.
Reserve Fund Transfer
The reserve fund must be transferred in full to the incoming agent's client account. The outgoing agent should provide a statement showing the balance, any planned expenditure, and the contribution schedule so that the incoming agent can manage the fund in accordance with the long-term maintenance plan.
Common Handover Problems and How to Resolve Them
Not every block management handover runs smoothly. Knowing how to deal with common problems can save time and reduce stress for everyone involved.
Outgoing Agent Delays the Handover
Some outgoing agents are slow to cooperate, whether through resentment at losing the contract or disorganisation. If the outgoing agent is dragging their feet, directors should send a formal written demand, escalate to the agent's professional body, and if necessary seek legal advice about obtaining a court order to compel the release of documents and funds.
Missing or Incomplete Records
It is not uncommon for the incoming agent to discover that records are incomplete or missing. The incoming agent should document the gaps, request the missing information in writing, and reconstruct records where possible. For critical documents such as fire risk assessments and insurance policies, the incoming agent may need to commission new reports to ensure compliance.
Disputes Over Client Money Balances
Disagreements over the amount of client money to be transferred can delay the financial handover. This typically arises where the outgoing agent claims the right to retain money for fees or outstanding invoices. Directors should request full supporting documentation for any deductions and seek legal advice if the amounts cannot be agreed.
Gap in Insurance Cover
A gap in buildings insurance cover during a handover could be catastrophic. The incoming agent must confirm that insurance is in force before the handover date and that the policy reflects the new agent. If the policy is due for renewal during the handover, cover should be arranged in advance.
Post-Handover Settling-In Period
The settling-in period after a block management handover typically lasts between one and three months. During this time, the incoming agent familiarises themselves with the building, its residents, and its particular requirements.
Site Inspection and Condition Assessment
One of the first tasks for the incoming agent is to carry out a thorough site inspection to assess the condition of the building, identify urgent maintenance issues, and verify that communal areas and safety equipment are in good order. This provides a baseline for future management and highlights any issues that may have been neglected by the previous agent.
Introductory Meeting with Directors and Residents
The incoming agent should arrange an introductory meeting with the directors and, where appropriate, an open meeting for residents. This is an opportunity to set expectations, discuss priorities, review the current service charge budget, and establish communication channels. Building a positive relationship from the start is essential for effective long-term management.
Review and Update of Management Systems
The incoming agent should review all contractor arrangements, check that health and safety compliance is up to date, update insurance records, and ensure that all statutory obligations are being met. Any issues identified should be flagged to the directors and addressed as a priority.
Frequently Asked Questions About Block Management Handovers
What documents should be handed over when changing managing agents?
When a block management handover takes place, the outgoing managing agent must transfer a comprehensive set of documents to the incoming agent. This includes all lease agreements for every unit in the building, the current buildings insurance policy and claims history, up-to-date service charge accounts and budgets, reserve fund statements, health and safety records including fire risk assessments and asbestos surveys, contractor agreements and warranties, Section 20 consultation records for any recent or ongoing major works, key holder registers, access codes and security system information, resident contact details and correspondence files, minutes of AGMs and directors' meetings, and any outstanding legal matters or tribunal proceedings. The RICS Service Charge Residential Management Code recommends that all records be handed over within a reasonable timeframe, and failure to transfer these documents promptly can leave the building exposed to compliance gaps and management disruption.
How long does a block management handover take?
A well-organised block management handover typically takes between four and eight weeks from the date the outgoing agent is formally notified of the change. The timeline depends on several factors, including the size and complexity of the building, the responsiveness of the outgoing agent, the volume of records to be transferred, and whether there are outstanding financial matters such as year-end accounts or pending insurance renewals. The first two weeks are usually spent on formal notification and gathering key information, weeks three and four focus on financial reconciliation and document transfer, and the final weeks cover resident communication, contractor novation, and system handover. Some handovers take longer if the outgoing agent is uncooperative or if there are disputes over client money balances. Planning early and appointing the new agent before the old contract expires helps ensure the smoothest possible transition.
What happens to the service charge fund during a handover?
During a block management handover, the outgoing managing agent is required to reconcile all client money accounts and transfer the full balance of service charge funds and reserve funds to the incoming agent. This includes any unspent service charge income for the current accounting period, the accumulated reserve or sinking fund, any client money held on trust for the leaseholders, and interest earned on client accounts where applicable. The outgoing agent should provide a full financial reconciliation statement showing all income received, expenditure incurred, and the closing balance. Under the RICS Service Charge Residential Management Code and TPI standards, client money must be held in designated trust accounts and transferred promptly upon termination of the management agreement. Any delay in transferring funds can disrupt ongoing maintenance, delay contractor payments, and leave the building financially exposed. Leaseholders and directors should request written confirmation of the transfer and verify the amounts against the most recent service charge accounts.
Can a managing agent refuse to hand over records?
A managing agent cannot lawfully refuse to hand over records that belong to the freeholder, the residents' management company, or the right to manage company. The records relating to the management of the building are not the property of the managing agent and must be returned when the management agreement is terminated. Under the RICS Service Charge Residential Management Code, managing agents are expected to cooperate fully during a handover and to transfer all relevant documents and financial records within a reasonable timeframe. If an outgoing agent refuses or delays the handover, the directors or freeholder can write a formal letter demanding compliance, escalate to the agent's professional body such as RICS, ARMA, or The Property Institute for disciplinary action, seek a court order requiring the release of records, and report the agent to the relevant redress scheme. In practice, most agents comply when faced with formal demands, but having legal support available is advisable if the outgoing agent proves obstructive.
What should residents expect during a management handover?
Residents should expect a period of transition during a block management handover, but good communication from both the outgoing and incoming agents should minimise disruption. In the early stages, residents will receive written notification of the change, including the identity and contact details of the new managing agent, the date the new agent takes over, and instructions for redirecting service charge payments. During the handover itself, there may be brief delays in responding to non-urgent maintenance requests as the new agent familiarises itself with the building. Emergency repairs and essential services should continue without interruption. Residents should update their standing orders or direct debits to the new agent's client account as directed, retain copies of any correspondence from both agents, and report any ongoing issues to the new agent once they have officially taken over. After the handover, the new agent will typically introduce themselves formally, carry out a site inspection, and hold an introductory meeting with directors and residents.
How do you ensure continuity of service during a handover?
Ensuring continuity of service during a block management handover requires careful planning and coordination between the outgoing agent, the incoming agent, and the directors or freeholder. The most important steps include appointing the new managing agent before the old contract expires so that there is an overlap period, transferring all contractor agreements and confirming that essential services such as cleaning, gardening, and lift maintenance will continue uninterrupted, ensuring that buildings insurance remains in force throughout the transition with no gap in cover, handing over keys, access codes, and security system credentials promptly, transferring emergency contact details and on-call arrangements, and briefing the incoming agent on any ongoing maintenance issues, pending works, or active insurance claims. A detailed handover checklist agreed between both agents helps ensure that nothing is missed. At Block, we follow a structured handover protocol that covers every aspect of the transition, from financial reconciliation to resident communication, so that service levels are maintained from day one.
Need Help With a Block Management Handover?
Whether you are planning to change managing agents and need guidance on the handover process, or you are an incoming agent looking for a transition framework, Block is here to help. Our experienced team has managed hundreds of block management handovers and understands every step, from document transfer and financial reconciliation to resident communication and continuity of service.