Block management fees: what managing agents charge
Most managing agents charge an annual fee per flat. In the blocks we manage, half pay a management fee of between £300 and £540 per flat per year including VAT, and the middle figure is about £420. Small blocks usually pay more per flat, because most agents set a minimum fee for the building.
How management fees are charged
The fee is normally quoted per flat per year, plus VAT at 20%. Residents' management companies and RTM companies are rarely VAT registered, so they usually can't reclaim the VAT. Always compare quotes on the VAT-inclusive figure.
Some agents quote a fixed fee for the whole building instead. Divide it by the number of flats so you can compare like for like.
What the fee should cover
A standard management fee should include the day-to-day running of the building:
preparing the annual service charge budget
issuing service charge demands and collecting payments
chasing early arrears
preparing the year-end service charge accounts
regular site inspections
instructing and managing contractors
keeping a compliance calendar (fire risk assessment, fire alarm and emergency lighting testing, electrical testing and so on)
arranging buildings insurance
holding money in a designated client account
answering leaseholder queries
attending the AGM
What is usually charged on top
Most agents charge extra for work outside routine management. Check the agent's schedule of fees for:
Section 20 consultations for major works
supervising major works, usually a percentage of the contract value
company secretarial work for the RMC or RTM company
LPE1 and other sale packs (normally paid by the selling leaseholder)
licences to alter or sublet
arrears recovery beyond the early chasing stage
handling insurance claims
For example, we charge £15 per unit for a Section 20 consultation (minimum £150), and 12% for supervising works up to £50,000, falling to 8% on larger contracts. Our full list is on the standard fees page.
Red flags to look for
Undisclosed commissions. Agents can earn commission on insurance and contractor work. You should be told how much, in pounds. See buildings insurance commission.
Long tie-ins, exit fees or handover fees. These make it costly to leave an agent who isn't performing.
No designated client account. Service charge money should be held on trust, separate from the agent's own money.
Extra charges for routine work. Budgets, accounts and inspections should be in the standard fee.
Vague admin charges. Every charge should be on a published schedule.
How to compare quotes
Put the quotes side by side and check:
exactly what is included in the fee
whether the price includes VAT
any minimum fee for the building
the schedule of extra charges
the initial term and notice period
how often the building will be inspected
whether you get a named property manager
The cheapest quote isn't always the best value. A low fee with a long list of extras can cost more over the year.
What Temphis charges
Our full block management starts from £350 per flat per year plus VAT. For small blocks and self-managing RMC or RTM companies, Temphis Flex starts from £100 per flat per year plus VAT. Contracts have an initial term of 12 to 18 months, then three months' notice.
Taking over through the Right to Manage? See RTM and small blocks. To estimate your building's full service charge, try the service charge budget calculator.
Ask us for a quote for your building.
Frequently asked questions
Who pays the managing agent's fee?
The fee is usually paid out of the service charge, so leaseholders share it in the proportions set by their leases, as long as the lease allows it.
Is a cheaper managing agent worse?
Not necessarily. Check what is excluded from the fee and what the extra charges are before deciding.
Can an RTM company negotiate the fee?
Yes. An RTM or RMC company chooses its own agent, so it can negotiate. We suggest getting at least three quotes.