Spring Contract Renewal Checklist for Block and Estate Management

Contract renewal season is the point in the year where a block either saves money or quietly commits to another twelve months of paying too much for something nobody has looked at. It is also the point at which a board can breach section 20 without realising it, simply by letting a contract roll.

Here is what to work through before the renewals land.

Start with the list, and the dates

Build a single schedule of every contract on the building: cleaning, grounds maintenance, lift maintenance, door entry, fire alarm and emergency lighting servicing, water hygiene, gates and barriers, waste, utilities, and the insurance renewal.

For each one record the start date, the term, the notice period and the renewal date. The notice period is the field that matters most, because a contract requiring three months' notice has already renewed by the time most boards look at it.

Identify which are qualifying long-term agreements

Under section 20 of the Landlord and Tenant Act 1985, a qualifying long-term agreement is any contract of more than twelve months under which a single leaseholder contributes more than £100 in an accounting period. Entering into one without statutory consultation caps recovery at £100 per leaseholder per year for the life of the agreement, unless the tribunal grants dispensation.

Two things follow. A rolling contract that renews for a further fixed term is a fresh agreement and needs consultation. And a twelve-month contract is not a qualifying long-term agreement, which is why blocks frequently place service contracts on twelve-month terms — though that is a decision about consultation, not necessarily the best commercial outcome.

Consultation takes time: a notice of intention with a thirty-day observation period, estimates obtained, a notice of estimates with a further thirty days, and reasoned responses. Starting in spring for contracts renewing in summer works. Starting in the renewal month does not.

Benchmark, but not everything at once

Tendering every contract annually is disruptive, damages relationships with contractors who are performing, and rarely repays the effort. A workable rhythm is to test the two or three largest lines each year on a rotation, so every contract is market-tested at least every third year.

When you do test, compare specification rather than price. A cleaning quote that is 20% cheaper on a reduced frequency is not cheaper. Ask for the schedule of works, the hours, the materials and the supervision arrangement, and compare those.

Check performance before you check price

Before renewing anything, look at what the year actually produced: response times against the contract, jobs attended more than once, complaints logged, and whether the contractor turned up on the frequency they are being paid for.

Site logs, signing-in sheets and the maintenance records for plant are the evidence. A lift contract with four callouts to the same fault is a specification problem, not a price problem, and re-tendering on price will not fix it.

Verify the contractors, annually

Insurance certificates expire. Check public liability and employers' liability cover, professional indemnity where relevant, current accreditations for the discipline — competent persons schemes for electrical work, water hygiene registration, lift engineering competence — and risk assessments and method statements for anything on site.

Where a contractor works on a higher-risk building, competence is not a formality: the accountable person has to be able to demonstrate it.

Compliance servicing has its own calendar

Fire alarm and emergency lighting servicing, lift LOLER examinations, fixed wiring testing, water hygiene monitoring and gas safety where applicable all run on statutory or standard frequencies that do not bend to the contract renewal date. Confirm each is booked for the year and diarised, and that the fire door checks required by the Fire Safety (England) Regulations 2022 — quarterly in common parts over 11 metres, annual best endeavours on flat entrance doors — are actually being carried out and recorded.

Insurance is a renewal too

Treat it as one. Check the declared reinstatement value against a current valuation rather than an indexed figure, review the excesses and the claims history, and confirm every material fact has been disclosed — works carried out, changes of use, cladding, any unremediated defect. Underinsurance triggers average on every claim, not only large ones.

Feed the outcome into the budget

Renewal decisions taken in spring are the evidence base for the next budget. A contract price agreed now is a known figure; an uplift you have negotiated down is a line you can explain to leaseholders when the budget circulates.

Our guide to service charge budgets sets out how those figures become demands that hold up, and the mid-year governance check covers what to review halfway through.

How Temphis approaches contracts

We take on ten to fifteen properties a year, which is what allows contracts to be reviewed on their merits rather than renewed on a schedule. Our fees are published in full at standard fees. What the management service covers is set out under block management, and transferring block manager explains how a handover works if your current contracts have not been looked at in years. Leaseholders considering taking control should read right to manage.

To discuss your renewals, get in touch.