Transparency in Block Management
What leaseholders are entitled to see from their managing agent, and the standards of block management transparency that every transparent property management company should meet. Open service charge accounts, clear reporting, and honest communication.
Why Transparency Matters in Block Management
Block management transparency is the foundation of trust between leaseholders and their managing agent. When residents can see how their money is being collected, held, and spent, disputes are reduced, confidence grows, and buildings are managed more effectively. Without transparency, even competent management can breed suspicion and conflict.
Transparency is also a matter of legal compliance. The Landlord and Tenant Act 1985 establishes clear obligations on landlords and their agents to provide financial information, consult on major expenditure, and account for service charge funds. Managing agents who fail to meet these obligations risk challenge at the First-tier Tribunal and damage to their professional reputation.
At Block, we believe that leaseholder communication management should be proactive rather than reactive. Rather than waiting for leaseholders to request information, a good managing agent provides it as a matter of course. This approach reduces the volume of complaints, builds stronger relationships, and creates a more positive environment for everyone involved in the building.
What Leaseholders Are Entitled to See
Understanding what information leaseholders are entitled to is essential for both residents and managing agents. The law is clear: leaseholders have a right to see detailed financial information and supporting documentation relating to their service charge. This right exists under the Landlord and Tenant Act 1985 and has been reinforced by subsequent legislation and tribunal decisions.
Leaseholders have the statutory right to inspect the accounts and receipts supporting their service charge demands. A managing agent who refuses access to this information, or makes it unnecessarily difficult to obtain, is not meeting the standards expected of transparent property management. For a full guide to leaseholder rights, see our dedicated page.
Financial Transparency and Block Management Accounting
Block management accounting should be clear, accurate, and timely. Block management annual accounts must be prepared for each accounting period and provided to leaseholders alongside a certified summary of costs. These accounts should show all income collected, every item of expenditure, and the balance held in reserve or sinking funds.
Budgets are equally important. A well-prepared service charge budget sets clear expectations about the costs leaseholders will face in the coming year. It should be based on actual expenditure from previous years, adjusted for known changes, and presented in a format that leaseholders can easily understand. Where significant variances arise during the year, the managing agent should explain them in a timely block management report.
The new rules for service charge accounting continue to emphasise the importance of prompt and accurate financial reporting. Under Section 20B of the Landlord and Tenant Act 1985, costs cannot be recovered through the service charge if more than 18 months have passed since they were incurred without the leaseholder being notified. Annual service charge accounts should be issued within six months of the accounting year end. This six month rule ensures that leaseholders receive financial information while it is still relevant and actionable.
Independent audits or accountant reviews add a further layer of assurance. For larger developments, having the accounts examined by an independent qualified accountant provides confidence that the figures are accurate and that funds have been properly managed. This is a standard that leaseholders should expect from any competent managing agent.
Communication and Reporting
Financial transparency is only part of the picture. Effective leaseholder communication management encompasses regular updates on building matters, clear block management meeting minutes, and accessible reporting that keeps everyone informed. The annual general meeting is one of the most important opportunities for open communication, but it should not be the only one.
Well-written meeting minutes are a key transparency tool. They provide a permanent record of decisions made, actions agreed, and issues discussed. Minutes from AGMs and directors' meetings should be circulated to all leaseholders, not just those who attended, ensuring that every resident has the same access to information about how their building is being managed.
Technology plays an increasingly important role in transparent communication. A resident portal managing agent platform gives leaseholders 24/7 access to their accounts, documents, and building information. A dedicated block management app can make it even easier for residents to view statements, report issues, and stay informed. We use modern technology to supplement, not replace, personal communication with a named property manager.
Regular written updates, whether monthly newsletters, quarterly reports, or ad hoc notices about specific works, demonstrate that a managing agent is engaged and accountable. Silence from a managing agent is rarely a sign that everything is running smoothly; more often, it is a sign that communication standards are not where they should be.
How We Deliver Transparent Management
At Block, block management transparency is built into every aspect of our service. Every building we manage benefits from a dedicated property manager, a secure online resident portal, and regular financial and management reporting. Our approach to block management accounting ensures that accounts are produced on time, budgets are realistic, and variances are explained clearly.
We welcome scrutiny because we have nothing to hide. If you would like to understand more about our standards and the responsibilities of a managing agent, or if you are considering a change because your current agent is not meeting the transparency standards you expect, we are happy to discuss how we can help.
Frequently Asked Questions
What does transparency mean in management?
Transparency in block management means that leaseholders and directors have clear, timely access to all relevant financial information, decisions, and activities relating to their building. This includes open service charge accounts, detailed management reports, meeting minutes, insurance documentation, and contractor invoices. A transparent managing agent operates without hidden fees or undisclosed commissions, communicates proactively, and provides straightforward answers to reasonable questions. Transparency builds trust, reduces disputes, and ensures that those paying the service charge can see exactly how their money is being spent.
What information are leaseholders entitled to?
Under the Landlord and Tenant Act 1985 and related legislation, leaseholders are entitled to a summary of service charge costs, the right to inspect invoices and receipts supporting the service charge, details of insurance policies and premiums, Section 20 consultation notices before major works or long-term qualifying agreements, annual accounts or a certified summary of expenditure, and notice of any proposed changes to the management arrangements. Leaseholders can also request access to the management plan, meeting minutes from AGMs or directors' meetings, and details of any commissions received by the managing agent.
How to write management meeting minutes?
Good block management meeting minutes should record the date, time, and location of the meeting, a list of attendees and apologies, a clear summary of each agenda item discussed, any decisions made and the reasoning behind them, action points with named responsible persons and deadlines, and financial updates including budget variances and expenditure approvals. Minutes should be factual and objective, avoiding personal opinions or editorial commentary. They should be circulated to all leaseholders within a reasonable time after the meeting, typically within 14 to 21 days.
What should be included in a management report?
A comprehensive block management report should include a financial summary covering income, expenditure, and variances against budget, an update on ongoing and completed maintenance works, compliance status for fire safety, electrical testing, gas safety, and other statutory obligations, a summary of any insurance claims, an update on arrears and debt recovery, details of upcoming planned works or Section 20 consultations, and any issues requiring decisions from directors or leaseholders. Reports should be issued regularly, typically monthly or quarterly, and written in clear, plain language.
Do management accounts have to be monthly?
There is no legal requirement for block management accounts to be produced monthly. However, the frequency of financial reporting should be agreed between the managing agent and the directors or freeholder. Monthly management accounts are considered best practice for larger developments or those with significant expenditure, as they allow tighter financial oversight and earlier identification of budget variances. Smaller buildings may find quarterly reporting sufficient. At minimum, annual service charge accounts must be provided within six months of the end of the accounting period.
What is the 6 month rule for service charge accounts?
The six month rule for service charge accounts is established under Section 20B of the Landlord and Tenant Act 1985. It provides that a landlord or managing agent cannot recover service charge costs from leaseholders if more than 18 months have passed since the costs were incurred, unless the leaseholder has been notified in writing within that 18-month period that the costs have been incurred and will be included in the service charge. Separately, managing agents are expected to provide annual service charge accounts within six months of the end of the accounting year, ensuring leaseholders receive timely financial information.
Expect More From Your Managing Agent
Talk to us about transparent, accountable block management that puts leaseholders first.