Managing Agent Transition Guide: How to Switch
A complete guide to switching managing agents for your block. Covers the managing agent handover process, the notice period to change managing agent, your rights as an RTM company or freeholder, what documents should be transferred, how to evaluate a new managing agent, and how to protect service charge funds during the transition.
Why Blocks Switch Managing Agents
There are many reasons why an RTM company, freeholder, or resident management company decides to change their managing agent. The decision is rarely taken lightly, as switching agents involves significant administrative effort and a period of disruption. However, when the current agent is failing to meet expectations, making a change is often the best way to protect the building and its leaseholders.
The most common triggers for switching managing agents include persistent poor service, a lack of transparency in financial reporting, excessive or unjustified fees, poor communication with leaseholders and directors, failure to carry out essential maintenance, and a general loss of confidence in the agent's ability to manage the building effectively. For an overview of what a managing agent should be delivering, see our managing agent duties guide.
Poor Service and Maintenance
The most frequent reason for changing managing agent is dissatisfaction with the standard of service. This can include unreturned phone calls and emails, failure to arrange repairs in a timely manner, neglect of communal areas, and a general lack of proactive management. When a building is not properly maintained, it affects the living conditions of all residents and can reduce property values. A managing agent who consistently fails to deliver on their contractual obligations gives directors legitimate grounds to terminate the agreement.
High Fees and Lack of Transparency
Another common reason for switching is a perception that the managing agent's fees are too high relative to the service provided, or that the agent lacks transparency in how service charge funds are spent. Leaseholders have a right to understand how their money is being used, and a managing agent who cannot provide clear, detailed accounts is failing in a fundamental duty. Our block management costs guide explains what fees are typical and what should be included within the standard management fee.
Loss of Confidence
Sometimes the decision to switch is not driven by a single issue but by a cumulative loss of confidence. Repeated minor failings, a defensive attitude to complaints, high staff turnover within the management company, or a feeling that the building is not a priority for the agent can all contribute to a breakdown in the relationship. Directors of an RTM company or a resident management company have a duty to act in the best interests of the leaseholders they represent, and if the current agent is not performing, exploring alternatives is a responsible step.
Legal Basis for Switching Managing Agents
The ability to change your managing agent depends on who has the authority to appoint and remove the agent under the lease and any management agreement in place. The legal position differs depending on whether the block is managed by an RTM company, a resident management company, or directly by the freeholder. Understanding these distinctions is essential before serving notice on your current agent.
RTM Company Rights
If your block has exercised the Right to Manage under the Commonhold and Leasehold Reform Act 2002, the RTM company has the power to appoint and dismiss the managing agent. The directors of the RTM company can resolve to terminate the existing management agreement and appoint a replacement agent, subject to the notice provisions in the agreement. This is one of the most significant benefits of the Right to Manage, as it gives leaseholders direct control over who manages their building and how their service charge funds are spent.
Resident Management Companies
Where a resident management company (RMC) exists, the directors of the RMC typically have the authority to appoint and remove the managing agent. The RMC will have entered into a management agreement with the agent, and the terms of that agreement will govern how the relationship can be terminated. Directors should review the management contract carefully to understand the notice period, any break clauses, and whether there are any penalties for early termination.
Freeholder-Appointed Agents
Where the freeholder appoints the managing agent and there is no RTM company or RMC with the power to make changes, leaseholders have limited direct control. In this situation, leaseholders can exercise the Right to Manage to take over the appointment of the agent, or they can apply to the First-tier Tribunal for the appointment of a manager under Section 24 of the Landlord and Tenant Act 1987. This route requires evidence that the freeholder's management of the building has been unsatisfactory and that it is just and convenient to appoint a new manager.
Notice Periods and Contractual Terms
Regardless of who has the authority to change the agent, the notice period to change managing agent is governed by the terms of the management agreement. Most agreements require between one and three months' written notice, although some contracts may specify longer periods or include automatic renewal clauses. It is critical to check these terms before serving notice, as incorrect or late notice may mean the termination is ineffective and the outgoing agent could claim damages for breach of contract.
Step-by-Step Transition Process
Switching managing agents involves a structured process that, if followed correctly, minimises disruption to the building and protects the interests of leaseholders. The following steps outline the typical transition process from decision to completion.
- Review the existing management agreement to confirm the notice period, termination clauses, and any automatic renewal provisions
- Hold a directors' meeting to formally resolve to terminate the current managing agent and begin the search for a replacement
- Serve formal written notice on the outgoing agent in accordance with the terms of the management agreement, keeping proof of delivery
- Prepare a tender specification setting out the building's requirements, including the number of units, services needed, and any specific issues
- Invite at least three managing agents to tender and evaluate proposals based on experience, references, fee structure, and professional accreditations
- Appoint the new managing agent and agree a start date, management fee, and the scope of services to be provided
- Notify leaseholders of the change in managing agent, the reasons for the switch, and the new agent's contact details
- Coordinate the handover of records, funds, insurance policies, keys, and contractor information from the outgoing to the incoming agent
- Verify that all service charge funds, including reserve fund balances, have been transferred in full to the new agent's client money account
- Conduct a post-handover review to ensure all records have been received and that the new agent has everything needed to manage the building effectively
A well-managed transition protects the building's finances, ensures continuity of essential services such as insurance and maintenance, and gives the new agent the best possible start. For guidance on what a management contract should cover, see our block management contract guide.
What Should Be Handed Over During the Transition
A thorough managing agent handover is critical to the success of the transition. The outgoing agent holds a significant volume of records, funds, and information that the incoming agent needs in order to manage the building from day one. The following categories represent the key items that should be transferred.
Financial Records and Funds
All service charge funds held in the client money account must be transferred to the incoming agent, including any reserve fund balances. The outgoing agent must provide current and historical service charge accounts, bank statements, details of any outstanding arrears, a schedule of payments received and due, and VAT records. The financial handover is the most important element of the transition and must be verified by the incoming agent and the directors before the process is considered complete.
Insurance Policies
Copies of all current insurance policies for the building must be handed over, including the buildings insurance policy, any directors' and officers' liability cover, and details of the insurer and broker. The incoming agent needs this information to ensure continuous cover and to manage any claims that are in progress. If the insurance policy is due for renewal, the transition should be coordinated to avoid any gap in cover.
Health and Safety Documentation
The health and safety file is a legal requirement and must be transferred in full. This includes the current fire risk assessment, asbestos management survey and register, electrical installation condition reports, gas safety certificates, legionella risk assessments, and records of any remedial works carried out. The incoming agent has an immediate responsibility for the building's compliance with health and safety legislation and cannot fulfil this duty without these records.
Contractor Details and Keys
Details of all current contractors and service providers, including cleaning, gardening, lift maintenance, and communal utilities, must be provided to the incoming agent along with copies of their contracts. Physical keys and access codes for the building, communal areas, plant rooms, and meter cupboards must also be handed over. Without this information, the new agent cannot maintain continuity of essential services.
Leaseholder Information and Legal Records
A schedule of all leaseholders with their contact details, a copy of the lease for each flat, details of any ongoing legal proceedings or disputes, minutes of directors' and residents' meetings, and correspondence relating to Section 20 consultations or Tribunal applications must all be transferred. This information allows the incoming agent to understand the building's history and any issues that require ongoing attention.
Common Problems During Handover
While many managing agent transitions proceed smoothly, problems can arise during the handover period. Being aware of these common issues in advance allows directors to take steps to prevent or mitigate them.
Delayed or Incomplete Records
The most common problem during a managing agent handover is the outgoing agent being slow to release records or providing incomplete documentation. This can be caused by disorganised record-keeping, resentment at losing the contract, or disputes over outstanding fees. Directors should set clear deadlines for the handover and escalate to the agent's regulatory body if records are not forthcoming within a reasonable period.
Missing or Delayed Funds
Delays in transferring service charge funds from the outgoing agent's client money account are a serious concern. Directors should obtain a confirmed balance from the outgoing agent before the termination date and verify that the full amount has been received by the incoming agent. Any discrepancy must be investigated immediately. Under RICS rules, client money must be held separately from the agent's own funds and must be released promptly upon termination.
Ongoing Disputes and Legal Proceedings
If there are ongoing disputes, Tribunal applications, or legal proceedings at the time of the transition, the outgoing agent must provide full details to the incoming agent. Failure to do so can result in deadlines being missed or the building's interests being compromised. Directors should specifically ask the outgoing agent to confirm whether any proceedings or disputes are outstanding.
How to Evaluate a New Managing Agent
Selecting the right replacement agent is just as important as deciding to leave the current one. A thorough evaluation process will help ensure that the new managing agent is the right fit for the building and will deliver the standard of service that leaseholders expect. For guidance on typical costs, see our block management costs guide.
- Confirm membership of RICS (Royal Institution of Chartered Surveyors) or ARMA (Association of Residential Managing Agents) for professional standards assurance
- Verify registration with a government-approved redress scheme such as the Property Ombudsman or the Property Redress Scheme
- Check that the agent holds adequate professional indemnity insurance and complies with client money protection requirements
- Request references from buildings of a similar size and type and follow up with those references directly
- Ask for a detailed breakdown of the management fee and what is included, versus what is charged as an additional extra
- Evaluate the agent's technology platform, including online portals for leaseholders and transparent financial reporting
- Meet the property manager who will be responsible for your building, not just the business development team
Taking the time to evaluate candidates thoroughly reduces the risk of needing to switch again in the near future. If you are ready to explore your options, our switch managing agent page explains how Block can help with a seamless transition.
Frequently Asked Questions About Switching Managing Agents
How do I change my block's managing agent?
To change your block's managing agent, you first need to identify who has the authority to appoint and remove the agent. This is usually set out in the management agreement or lease. If an RTM (Right to Manage) company is in place, the directors of the RTM company have the power to terminate the existing managing agent's contract and appoint a new one. If the freeholder appoints the agent, you may need to exercise the Right to Manage under the Commonhold and Leasehold Reform Act 2002 before you can make a change. Once authority is established, you should review the existing management agreement for notice periods and termination clauses, serve formal written notice on the current agent, select a replacement managing agent through a competitive tender process, and agree a handover date. The outgoing agent is then required to transfer all records, funds, and documentation to the incoming agent.
What notice period is required to switch managing agents?
The notice period required to switch managing agents depends on the terms of the management agreement between the block and the current agent. Most management agreements specify a notice period of between one and three months, although some contracts may require six months' notice. If there is no written management agreement in place, reasonable notice of at least one month should be given. It is essential to check the specific terms of your agreement, as failing to give the correct notice could result in the outgoing agent claiming compensation for the unexpired term. Where an RTM company is exercising its right to appoint a new agent, the Commonhold and Leasehold Reform Act 2002 provides the legal framework, but the contractual notice period in the management agreement still applies. Always serve notice in writing and keep proof of delivery.
What documents should be handed over when changing managing agent?
When changing managing agent, the outgoing agent should hand over a comprehensive set of records and documents. This includes the current and historical service charge accounts, bank statements, details of the client money account and any reserve fund balances, copies of all current insurance policies, contractor agreements and contact details, the health and safety file for the building, fire risk assessments, asbestos surveys, electrical and gas safety certificates, building plans and specifications, the lease for each flat, details of any ongoing disputes or legal proceedings, a schedule of leaseholder contact information, keys and access codes for the building, and copies of minutes from directors' and residents' meetings. The outgoing agent is legally and professionally obliged to hand over these records promptly. Failure to do so can be reported to RICS or the Property Ombudsman.
Can a managing agent refuse to hand over records?
A managing agent cannot lawfully refuse to hand over records and documents that belong to the building or the leaseholders. Under the terms of most management agreements, and under the RICS Service Charge Residential Management Code, the outgoing agent is required to transfer all records, funds, and documentation to the incoming agent or to the client within a reasonable timeframe, typically within 28 days of the termination date. If an agent refuses or unreasonably delays the handover, the RTM company or freeholder can make a formal complaint to the agent's regulatory body, such as RICS or the Property Ombudsman. In serious cases, legal action can be taken to compel the release of records and funds. Some agents may attempt to withhold records pending payment of disputed fees, but this is not considered acceptable professional practice.
How long does it take to switch managing agents?
The process of switching managing agents typically takes between two and four months from the initial decision to the completion of the handover. The timeline depends on several factors, including the notice period required under the management agreement, the complexity of the building's financial and administrative records, and the cooperation of the outgoing agent. The first stage, which involves reviewing the management agreement and serving notice, usually takes two to four weeks. Selecting a new managing agent through a tender process can take a further three to six weeks. The handover period, during which records, funds, and responsibilities are transferred, typically takes two to four weeks after the termination date. Delays can occur if the outgoing agent is slow to release documents or if there are disputes over outstanding fees or service charge balances.
What should I look for in a new managing agent?
When selecting a new managing agent, you should look for membership of a recognised professional body such as RICS (Royal Institution of Chartered Surveyors) or ARMA (the Association of Residential Managing Agents). These memberships indicate that the agent is bound by a code of practice and a complaints procedure. You should also check that the agent holds appropriate professional indemnity insurance and is registered with a government-approved redress scheme such as the Property Ombudsman. Request references from buildings of a similar size and type to your own, and ask about their fee structure, including what is covered by the management fee and what incurs additional charges. Transparency in accounting, responsiveness to leaseholder queries, and experience with your type of building are all important factors. Finally, meet the team who will be managing your building day-to-day, not just the sales team.
Ready to Switch Managing Agent?
Whether you are an RTM company looking to appoint a new agent, a freeholder seeking a more professional management service, or directors who want to understand the managing agent handover process, Block Management Company is here to help. We manage a seamless transition, handling the full switching managing agents process from notice to handover, so you can focus on your building. Visit our switch managing agent page to get started.