What Is a Property Management Company (PCM) in the UK?
Understand the essential role of Property Management Companies in the UK, overseeing the collective administration and financial aspects of leasehold properties.
A Property Management Company (PMC) in the UK provides services for managing residential properties, especially leasehold properties. PMCs act on behalf of landlords or freeholders to oversee a building’s upkeep and operations. Their primary role involves handling day-to-day administration and maintenance, essential for multi-occupancy buildings with shared responsibilities.
Role of a Property Management Company
Property Management Companies maintain and operate residential buildings. They manage common parts, such as communal hallways, staircases, lifts, roofs, and exterior structures. This includes arranging routine maintenance, necessary repairs, and handling emergency requests for these shared areas.
Beyond physical maintenance, PMCs ensure compliance with health and safety regulations, conducting risk assessments for fire, asbestos, and general building safety. They also manage the building’s insurance, covering the structure and communal areas, and oversee financial administration, including budgets and year-end accounts.
Appointment and Oversight
Property Management Companies are typically appointed through a lease agreement, where the freeholder designates a management company. Alternatively, residents in a block of flats can establish a Residents’ Management Company (RMC) or exercise their “Right to Manage.” While no single statutory regulator exists for all UK PMCs, professional bodies and legislative frameworks provide oversight.
Organizations like the Royal Institution of Chartered Surveyors (RICS) and the Association of Residential Managing Agents (ARMA) set professional standards and codes of practice. RICS publishes the Service Charge Residential Management Code, promoting transparency and best practices. The Landlord and Tenant Act 1985 outlines rights and responsibilities for landlords and leaseholders regarding service charges and property standards.
Understanding Service Charges
Service charges are fees paid by leaseholders to the landlord or management company for maintaining communal areas and the building’s structure. These variable charges typically cover cleaning, gardening, repairs, building insurance, utilities for common areas, and management fees. The specific services are outlined in the lease agreement, and costs are usually split among leaseholders.
Leaseholders have rights regarding service charges, including receiving a summary of costs and inspecting accounts. The Landlord and Tenant Act 1985 stipulates that service charges must be “reasonably incurred” and for works carried out to a “reasonable standard.” Leaseholders can challenge charges if they are excessive or for substandard work, often through an application to the First-tier Tribunal (Property Chamber). Contributions to a reserve fund for future major works, such as roof replacements, are also commonly included in service charges.