Uncovering the Silent Killer: The Dangers of Choosing the Wrong Block Management Company

Right to Manage (RTM) gives leaseholders control over how their building is run. But control only pays off if the RTM company appoints a competent, diligent block managing agent. Choosing the wrong one can erode finances, invite regulatory action, and fracture the resident community. Here’s what goes wrong—and how it shows up on the ground.

1) Financial damage that compounds block management.

Bloated service charges and weak value for money. Poor managers fail to tender competitively, accept weak specifications, or over-rely on favoured contractors. You see creeping costs without commensurate improvement, vague invoices, and reactive call-outs instead of planned maintenance.

Underfunded reserves (sinking funds). Without a long-term maintenance plan, cyclical works (roofs, M&E, decoration) are missed. When the inevitable failure arrives, there’s no cushion—forcing sudden, contentious demands on leaseholders and increasing the risk of disputes or non-payment.

Insurance pitfalls. Inadequate sums insured, weak claims handling, or missing specialist extensions (e.g., non-negligence cover during major works) push premiums up and claims down. A couple of mishandled claims can wipe out any headline “management fee saving”.

Arrears drift. Soft credit control means compliant payers subsidise late ones. Cashflow tightens, works are deferred, and contractors start refusing attendance—exactly when you need them most.

2) Legal and compliance exposure

Fire safety and life-safety obligations. Buildings need regular fire risk assessments; actions must be tracked and evidenced. Poor managers miss remedial deadlines, documentation, or resident communications—risking enforcement action and, more importantly, resident safety.

Plant and equipment compliance. Passenger lifts require routine servicing and thorough examinations; communal electrics need periodic inspection; gates, boilers, water systems and asbestos plans need active management. Lapses bring real-world risks and potential regulatory scrutiny.

Consultation failures on major works. If Section 20 consultation isn’t run correctly—right notices, timelines, and summaries—leaseholders can challenge costs, even when works were necessary. That turns essential projects into litigated headaches.

Data protection and company housekeeping. Sloppy handling of resident data and poor minute-keeping or filings create avoidable vulnerabilities for RTM directors and weaken your position in disputes.

Contractual risk. Weakly written contracts or simply “booking jobs by email” with unclear scope/price lead to extras, poor performance, and limited recourse when things go wrong.

3) Operational breakdowns

Reactive firefighting instead of planned upkeep. Without an asset register and planned preventive maintenance (PPM), managers lurch from leak to lift fault to lighting failure—each fix more expensive than the last.

Poor contractor oversight. No QA checks, no sign-offs, and no photographic records mean repeat defects and short-lived repairs. Residents perceive “nothing ever gets finished.”

Communication black holes. Slow, templated replies and missing updates magnify minor issues into crises. Rumour and WhatsApp groups fill the vacuum, and trust in the RTM board erodes.

Handover failures. When switching managers, weak onboarding—missing O&M manuals, warranties, drawings, or historic accounts—causes duplicated surveys, delays, and accidental non-compliance.

4) People problems and community friction

Leaseholder disputes escalate. When charges are unclear or standards slip, more leaseholders withhold service charges or head to the First-tier Tribunal (FTT). Even if the RTM ultimately prevails, the time and stress land on volunteer directors.

Director burnout and churn. RTM directors are unpaid. If they spend their evenings chasing the manager, scrutinising invoices, or fielding angry emails, they’ll step down. Momentum stalls and institutional memory is lost.

Reputational damage. Prospective buyers and lenders now ask tougher questions about building management. A poor track record can drag sale times and values—especially in smaller blocks where word travels fast.

5) Long-term asset value at risk

Deferred maintenance becomes capital decay. Water ingress, plant neglect, and unaddressed fire-stopping issues are cheaper to prevent than to cure. The wrong manager turns maintenance into capital expenditure.

Non-compliance depresses valuations. Surveyors and lenders mark down buildings with unresolved safety items, absent documentation, or contentious service charge histories.

How the warning signs show up

• Service charge accounts arrive late, thin on backup, or riddled with miscoding.

• No clear 3–5 year plan or timetable of statutory checks.

• Section 20 notices are rushed or incomplete; “urgent” works appear with no paper trail.

• Resident queries languish for weeks; the manager is invisible on site.

• Contractors rotate constantly, or the same problems recur after “fixes.”

• Arrears trend up; cashflow statements are opaque.

• Insurer asks for risk improvements that never get actioned, and premiums jump at renewal.

What good looks like (and why it matters)

Even though this article focuses on the downside, it’s useful to contrast with hallmarks of a strong block manager:

• Governance: a clear management agreement, KPIs, regular board meetings, site inspection reports, and action logs.

• Planning: asset register, PPM schedule, and a funded 3-year plan that informs the budget and Section 20 timing.

• Transparency: monthly cashflow, aged debtors, variance reports to budget, invoice packs, and tender comparisons.

• Compliance engine: a live compliance tracker for fire, lifts, electrics, water hygiene, asbestos, gates/doors, and insurance conditions.

• Resident comms: structured updates (works calendars, FAQs), quick triage for emergencies, and courteous handling of vulnerable residents.

• Commercial rigour: competitive tendering, clear scopes, measurable outcomes, and supplier performance reviews.

These disciplines don’t just keep you “safe”—they reduce lifetime costs, cut disputes, and protect asset value.

Practical steps if you suspect you’ve got the wrong manager

• Audit the basics. Request a compliance pack (latest FRA and action log, lift examinations, EICR, water hygiene, asbestos register), the asset register, the PPM plan, and year-to-date budget vs. actuals with an aged debtors list. Gaps are revealing.

• Set KPIs and timescales. Document service standards (response times, site visit frequency, reporting cadence). If improvements don’t materialise, you have objective grounds to change.

• Control the purse. Require dual approval for large spends, mandate competitive quotes above set thresholds, and insist on scopes/specs before works.

• Re-tender professionally. Use a clear request for proposal, seek references from buildings similar to yours, interview the proposed day-to-day manager (not just the sales lead), and check fee models for hidden uplifts or commissions.

• Strengthen the board. Rotate roles, minute decisions, and create a simple risk register so knowledge survives director turnover.