Contractor Management Guide for Blocks of Flats
A comprehensive guide to contractor management in blocks of flats, covering contractor procurement, Section 20 consultation requirements, contractor vetting, health and safety obligations, contract terms, and how to handle defective contractor work. Understand how managing agents procure, oversee, and manage contractors for maintenance and repair works.
Why Contractor Management Matters in Blocks of Flats
Effective contractor management is one of the most important responsibilities of a managing agent or resident management company. The condition of a block of flats depends on the quality of the contractors appointed to maintain and repair it. Poor contractor procurement, inadequate vetting, or weak oversight can result in substandard work, wasted service charge funds, safety hazards, and costly disputes that affect every leaseholder.
A block of flats requires a range of contractor types to keep it safe and well maintained, including cleaning contractors, gardening firms, fire safety specialists, lift engineers, electrical contractors, plumbers, roofers, and decorators. Each must be properly vetted, contracted, and supervised to ensure that the work meets the required standard and represents value for money.
This guide explains the key stages of the contractor management process, from procurement and vetting through to performance monitoring, payment, and handling defective work. For guidance on planning maintenance programmes, see our planned maintenance guide.
Contractor Procurement Process
A structured contractor procurement process is essential for obtaining quality work at a fair price, whether the work involves routine maintenance or a major works project.
Competitive Tendering
For any significant work, the managing agent should obtain a minimum of three competitive tenders based on a clear and consistent specification. The specification should describe the scope of works, materials, expected timescales, and access constraints. Price alone should not determine the outcome; the contractor's experience, track record, and ability to deliver safely are equally important. For qualifying works above the statutory threshold, the Section 20 consultation process mandates a formal tendering approach that gives leaseholders the right to nominate contractors.
Preferred Supplier Lists
Many managing agents maintain preferred supplier lists for routine works such as communal cleaning, gardening, and minor repairs. These lists are built from vetted contractors with proven track records, appropriate insurance, and qualifications. They streamline reactive maintenance procurement but should be re-tendered periodically to ensure competitiveness.
Section 20 Consultation Requirements
The Section 20 consultation process under the Landlord and Tenant Act 1985 applies when the cost of qualifying works exceeds two hundred and fifty pounds per leaseholder, or when a qualifying long-term agreement exceeds one hundred pounds per leaseholder per year. Failure to comply limits the amount recoverable through the service charge.
Stage One: Notice of Intention
The managing agent must serve a notice of intention on each leaseholder, describing the proposed works, explaining the reasons, and inviting written observations within at least thirty days. Leaseholders must also be informed of their right to nominate a contractor from whom an estimate should be sought.
Stage Two: Estimates and Nominations
The managing agent must obtain estimates from at least two contractors, one of which should be unconnected to the managing agent or freeholder. If any leaseholder has nominated a contractor, an estimate must be obtained from that contractor. For detailed guidance, see our Section 20 guide.
Stage Three: Notice of Estimates
A second notice summarises the estimates received, sets out observations from Stage One, and invites further observations within at least thirty days. If the managing agent proposes to accept a tender other than the lowest, the reasons must be explained. Only after this period expires can the contractor be appointed.
Contractor Vetting and Due Diligence
Thorough contractor vetting is essential before any contractor is appointed to work on a block of flats, protecting leaseholders, the managing agent, and the building from unqualified, uninsured, or unreliable contractors.
Insurance Verification
Every contractor must hold adequate insurance before being permitted to carry out work. This includes public liability insurance, employers' liability insurance where the contractor employs staff, and professional indemnity insurance for those providing design or advisory services. The managing agent should verify the level of cover, policy expiry date, and identity of the insurer before work commences.
Qualifications and Accreditations
Contractors should hold relevant trade qualifications and industry accreditations. Electrical contractors should be registered with NICEIC or NAPIT, gas engineers must be Gas Safe registered, and fire safety contractors should hold BAFE or FIA certifications. General contractors should hold CSCS cards and membership of recognised trade bodies.
References and DBS Checks
The managing agent should request references from previous clients, particularly those involving similar works on residential buildings. Where contractors will be working in close proximity to residents or vulnerable people, DBS checks may be appropriate. While not a legal requirement for all maintenance work, DBS checks provide additional assurance and are increasingly expected as part of a comprehensive contractor vetting process.
Health and Safety Obligations
Health and safety is a fundamental consideration when managing contractors in blocks of flats. The managing agent has duties under the Health and Safety at Work Act 1974 and, for construction projects, under the CDM Regulations 2015. For a comprehensive overview, see our health and safety guide.
Risk Assessments and Method Statements
Before any work commences, the contractor should provide a risk assessment identifying the hazards, affected persons, and control measures. A method statement should set out how the work will be carried out step by step. These documents should be reviewed by the managing agent before giving permission to proceed.
CDM Regulations and Resident Safety
The CDM Regulations 2015 apply to all construction work, including maintenance, repair, and renovation. For notifiable projects, a principal designer and principal contractor must be appointed. Understanding these regulations is essential for managing agents overseeing major works. Managing agents must also ensure residents are protected during works by providing advance notice, maintaining safe access, keeping communal areas free from hazards, and putting temporary fire safety measures in place where existing systems are affected.
Contract Terms and Service Level Agreements
Well-drafted contract terms are the foundation of effective contractor management. Every appointment should be governed by a written contract setting out both parties' rights and obligations. For ongoing services, a service level agreement should define the standard of performance expected.
- A clear description of the scope of works or services to be provided
- The contract price, payment terms, and provisions for variations
- The programme for the works, including start and completion dates
- A defects liability period, typically six to twelve months from practical completion
- Retention provisions, usually five per cent held until the end of the defects period
- Insurance requirements and evidence of cover before work commences
- Health and safety obligations, including risk assessments and method statements
- Termination provisions allowing either party to end the contract for cause
- Dispute resolution mechanisms, including adjudication or mediation clauses
- Service level targets with measurable performance indicators for ongoing contracts
Monitoring Contractor Performance and Payment
Appointing a contractor is only the beginning. Ongoing contractor performance monitoring ensures that work is completed to the required standard, on time, and within budget. The managing agent should carry out regular inspections both during and after completion, use resident feedback to assess ongoing services, and conduct stage inspections at key milestones for project works.
Payment Terms and Retention
Payment terms should be clearly set out in the contract. For project works, payments should be linked to the completion of defined milestones, verified by inspection. A retention of typically five per cent should be held until the end of the defects liability period. Half the retention is normally released at practical completion and the remainder at the end of the defects period, subject to all defects being rectified.
Performance Reviews
For contractors on long-term agreements, formal performance reviews should be conducted at least annually, assessing the contractor against service level targets and considering resident feedback. Where a contractor consistently fails to meet standards, the managing agent should consider formal warnings, payment withholding, or contract termination in accordance with service charge obligations to leaseholders.
Handling Contractor Disputes and Defective Work
Even with thorough procurement and vetting, disputes with contractors can arise. Common causes include defective contractor work, programme delays, disagreements over variations, and health and safety failures. A structured approach to resolving disputes protects leaseholders' service charge funds.
Documenting Defects and Contractual Remedies
The first step in dealing with defective contractor work is thorough documentation with photographs, written descriptions, and relevant measurements. A formal snagging list should be issued with a clear deadline for remedial action. The defects liability period obliges the contractor to remedy defects at their own expense. If they fail to do so, the managing agent may engage an alternative contractor and deduct the cost from retention monies or pursue a claim for breach of contract.
Dispute Resolution
Where a dispute cannot be resolved through negotiation, the contract may provide for adjudication under the Housing Grants, Construction and Regeneration Act 1996, mediation, or arbitration. As a last resort, proceedings may be issued through the courts or the Technology and Construction Court for complex claims.
Key Contractor Types for Blocks of Flats
Blocks of flats require a range of specialist and general contractors. The following are the most common contractor types that managing agents procure and manage on behalf of leaseholders.
Cleaning and Gardening Contractors
Communal cleaning and grounds maintenance are among the most visible services in a block. Regular cleaning of hallways, stairwells, lifts, and bin stores, together with garden maintenance, directly affects residents' quality of life. These contractors are typically engaged on long-term service agreements.
Fire Safety Contractors
Fire safety contractors carry out fire alarm testing, emergency lighting checks, fire door inspections, dry riser testing, and fire risk assessments. These legally required services must be performed by competent contractors. See our health and safety guide for more on fire safety responsibilities.
Lift Engineers and Electrical Contractors
Blocks with lifts require specialist lift engineers for regular servicing, statutory inspections under LOLER 1998, and breakdown response. Electrical contractors maintain and test the communal electrical installation, including periodic inspection and testing (EICR), communal lighting repairs, and distribution board upgrades. Both must be registered with appropriate competent person schemes and hold relevant qualifications.
Frequently Asked Questions About Contractor Management
How should a managing agent select contractors for a block of flats?
A managing agent should select contractors through a structured procurement process that ensures value for money, quality of work, and accountability. This begins with identifying the scope of works and preparing a clear specification so that all contractors are quoting on the same basis. The agent should obtain a minimum of three competitive tenders for any significant work and evaluate each tender not only on price but also on the contractor's experience with blocks of flats, their references from similar buildings, their insurance cover, and their qualifications. Preferred supplier lists can be maintained for routine works such as cleaning, gardening, and minor repairs, but these should be reviewed regularly and re-tendered periodically to ensure ongoing competitiveness. For qualifying works above the statutory threshold, the Section 20 consultation process must be followed, which itself requires obtaining at least two estimates and giving leaseholders the opportunity to nominate contractors. A transparent selection process protects the managing agent from challenge and gives leaseholders confidence that their service charge contributions are being spent wisely.
What insurance should contractors have to work on blocks of flats?
Contractors working on blocks of flats should hold a minimum of three types of insurance. Public liability insurance is essential and should provide cover of at least two million pounds, though five million or ten million may be appropriate for higher-risk works such as scaffolding, roofing, or structural repairs. This covers injury to third parties or damage to property caused by the contractor's work. Employers' liability insurance is a legal requirement for any contractor who employs staff and must provide a minimum of five million pounds of cover. Professional indemnity insurance is important for contractors providing design, consultancy, or specialist advisory services, such as fire risk assessors or structural engineers. The managing agent should request copies of all insurance certificates before any work commences and verify that the policies are current, that the level of cover is adequate for the works being undertaken, and that the insurer is reputable. Allowing a contractor to work without adequate insurance exposes the building, the managing agent, and the leaseholders to significant financial risk.
Does contractor work in a block require Section 20 consultation?
Section 20 consultation is required when the cost of qualifying works exceeds two hundred and fifty pounds per leaseholder, or when the cost of a qualifying long-term agreement exceeds one hundred pounds per leaseholder per year. Qualifying works means works on a building or any other premises, so most repair, maintenance, and improvement works carried out on a block of flats will be caught by the threshold. The consultation process has three stages: a notice of intention describing the proposed works and inviting leaseholder observations, a stage where estimates are obtained and leaseholders can nominate contractors, and a final notice setting out the estimates received and the reasons for selecting a particular contractor. Failure to comply with the Section 20 process means the landlord's ability to recover costs through the service charge is capped at two hundred and fifty pounds per leaseholder unless a dispensation is obtained from the First-tier Tribunal.
What health and safety requirements apply to contractors in blocks of flats?
Contractors working in blocks of flats must comply with a range of health and safety legislation, including the Health and Safety at Work Act 1974 and the Construction (Design and Management) Regulations 2015 where applicable. For any construction or maintenance project, the contractor should provide a risk assessment and method statement before work begins, identifying the hazards associated with the work, the people who may be affected, and the control measures that will be put in place. Where works are notifiable under the CDM Regulations, a principal designer and principal contractor must be appointed, and a construction phase plan must be prepared. Even for smaller, non-notifiable works, the managing agent should satisfy itself that the contractor has adequate health and safety policies, that operatives are competent and suitably trained, and that the works will not put residents, visitors, or other contractors at risk. Common hazards in blocks of flats include working at height, asbestos-containing materials, electrical safety, fire safety during hot works, and the safe storage of materials in communal areas.
How do you deal with defective contractor work in a block?
Dealing with defective contractor work requires prompt action and a clear understanding of the contract terms. The first step is to document the defects thoroughly with photographs, written descriptions, and any relevant measurements or test results. The managing agent should then notify the contractor in writing, setting out the nature of the defects and referencing the relevant contract clauses that require the work to be carried out to the agreed standard. Most well-drafted contracts include a defects liability period, typically six to twelve months from practical completion, during which the contractor is obliged to return and remedy any defects at no additional cost. If the contractor fails to remedy the defects within a reasonable time, the managing agent may engage an alternative contractor to carry out the remedial work and recover the cost from the original contractor, either by deducting from retention monies held or by pursuing a claim for breach of contract.
Can leaseholders recommend contractors for block maintenance?
Leaseholders can recommend contractors for block maintenance, and in some circumstances they have a formal right to do so. Under the Section 20 consultation process, leaseholders are invited to nominate contractors during the second stage of consultation. The managing agent is required to obtain an estimate from any nominated contractor, provided that contractor is willing and able to carry out the works. Even outside the formal Section 20 process, managing agents should be open to suggestions from leaseholders who may have knowledge of reliable local contractors or have had positive experiences with particular firms. However, the managing agent retains the responsibility for vetting any recommended contractor to ensure they meet the required standards for insurance, qualifications, health and safety, and financial stability. A leaseholder recommendation does not oblige the managing agent to appoint that contractor, and the final decision must be based on an objective assessment of value for money, quality, and suitability.
Need Help Managing Contractors for Your Block?
Whether you need support with contractor procurement, Section 20 consultation for major works, contractor vetting, or managing defective contractor work, Block is here to help. Our experienced team manages contractor relationships across hundreds of buildings nationwide, ensuring quality, compliance, and value for money for every leaseholder.