Property Asset Management

Lease first: The lease terms always take precedence.

Most leases treat tenant‑specific utility consumption as outside the service charge, because it relates to the tenant’s own direct usage rather than common parts. Leases often contain a specific indemnity or reimbursement clause allowing the landlord to recover each tenant’s metered consumption directly.

We would request a float from the landlord so we can ensure utilities bills are paid on time to avoid late payment charges or disconnection. We would recharge the tenants, usually, on a quarterly basis. Utility consumption used only by the common parts will be recoverable from the service charge.

Good forecasting and accurate budgets are just as important as collecting payments on time.

Understand why arrears arise

Arrears often stem from tenant covenant strength, but can also reflect trust, transparency and confidence in how the service charge is being managed.

Focus on what can be influenced

While we cannot change a tenant’s underlying covenant, we can improve transparency, communication and confidence in the management process.

Use PropTech to build trust

Tenant portals or digital platforms that store budgets, invoices and updates help demonstrate clarity and accountability.

Provide clear explanations of account management

Transparent commentary on how the account is run reduces challenges, misunderstandings and disputes.

Share information on exceptional or material costs early

Proactive communication about significant one‑off items prevents “invoice shock” and supports timely payment.

Plan accounts carefully to support tenant cash flow

Avoid unexpected spikes in on‑account charges through stable phasing and forward visibility of upcoming costs.

Apply strong and early‑stage credit control

A structured process that identifies and addresses arrears early prevents problems escalating and protects overall cash flow.

Ensure all costs comply with RICS guidance

Certain costs cannot be recovered through the service charge as per the RICS (Royal Institution of Chartered Surveyors) Professional Statement, ensuring recoverability is clear and fully compliant to avoid disputes.

We would speak to the tenant to understand their position; most tenants will usually pay once chased. If they do not, then the Management Surveyor will make contact to understand the tenant’s final position. If cash flow is a longer-term concern, the following options could be considered & discussed with the Landlord before action is taken:

1. Allowing monthly payments and/or a payment plan in the short term
2. If required and appropriate to do so, initiate CRAR (Commercial Rent Arrears Recovery)
3. Check for any Guarantor / Surety / AGA / Privity
4. Consider drawing down upon the Rent Deposit if there is one.
5. Consider negotiating a surrender
6. Consider Forfeiture
7. If there is a subtenant in occupation, consider collecting their rent directly by servicing the correct notice.

Ensuring managed buildings are well kept/cared for that meet regulatory standards, upkeep, & forward thinking maintenance ensures a building is attractive to tenants & buyers. Having a structured approach to asset management supports longevity and contributes to stronger returns for owners.

The Building Safety Act 2022 (BSA) imposes strict duties on owners and managers of high-rise residential buildings (HRBs) to manage fire and structural safety, focusing on the “golden thread” of information. Key duties include registering HRBs, assessing risks, managing safety during design/construction, and maintaining safety records. Immediate actions include registering high-rise buildings with the Building Safety Regulator (BSR), appointing competent safety managers, and reviewing building documentation.

Key Responsibilities by Role

• Principal Accountable Person (PAP): Assesses and manages risks, keeps a “golden thread” of information, and registers the building.
• Accountable Person (AP): Must cooperate with the PAP to identify risks (fire/structural) and report to the BSR.
• Client/Building Owner: Must ensure safety is considered from the outset of building projects, appointing competent Designers and Principal Contractors.
• Contractors/Designers: Duty holders must have the necessary skills, knowledge, and experience to manage safety risks.

What You Need To Do Next

• Register Existing HRBs: Ensure all existing higher-risk residential buildings are registered with the Building Safety Regulator.
• Establish the “Golden Thread”: Begin capturing, storing, and managing safety data on your building’s design, construction, and maintenance to ensure it is available to the BSR.
• Perform Risk Assessments: Assess fire and structural safety risks in occupied high-rise buildings and put in place measures to manage them.
• Engage with Residents: Create a resident engagement strategy to share information about fire and structural safety.
• Review Competence: Ensure all staff and contractors employed to manage or work on buildings are competent in managing safety risks according to the act.
• Update Safety Cases: Prepare a safety case report to demonstrate that you are managing safety risks effectively.

Reducing a building’s energy consumption without major capital expenditure (CapEx) is best achieved through operational efficiency, commonly known as “low-hanging fruit” measures. Key strategies include optimising HVAC (Heating Ventilation Air Conditioning) schedules to save 15-30%, implementing setpoint adjustments (5-15% savings), switching to LED (Light Emitting Diodes) lighting, performing an energy audit, and encouraging behavioural changes.

Operational & Low-Cost Energy Savings

• HVAC Optimisation (Highest Impact)
• Schedule Optimisation: Adjust HVAC run times to match actual occupancy hours, avoiding conditioning empty spaces.
• Setpoints: Implement “deadbands” (e.g.,) where neither heating nor cooling operates.
• Preventive Maintenance: Replace filters, clean coils, and repair duct leaks to improve efficiency.

Lighting Upgrades & Controls

• LED Retrofits: Replace incandescent and fluorescent bulbs with LED, which can reduce lighting energy by up to 90%.
• Occupancy Sensors: Install motion sensors in low-use areas like restrooms, storage rooms, and kitchens.
• Daylight Harvesting: Maximise natural light and use sensors to dim electric lights near windows.

Behavioural & Equipment Management

• Plug Load Management: Set computers to sleep modes and use smart power strips to eliminate phantom energy loads from office equipment.
• Occupant Engagement: Train staff on the importance of turning off equipment, lights, and closing windows/doors.
• Temperature Policies: Set clear policies for thermostat settings to prevent individual unit adjustments.

Building Envelope Improvements (Low-Cost)

• Weatherstripping: Add weatherstripping and caulk to windows and doors to prevent air leakage.
• Door Closers: Ensure exterior doors close automatically to maintain indoor temperatures.
• Key Next Step: Conducting an energy audit is the best way to understand specifically where your building wastes energy.

A Planned Preventive Maintenance (PPM) programme is almost certainly worthwhile for an asset if it is critical to operations, legally regulated, or high-value. While PPM requires an upfront investment, it is estimated to save 12–18% in costs over reactive maintenance, with potential ROI up to 400% through reduced failure rates and extended asset life.

When PPM is Highly Worthwhile

• Criticality: If failure of the asset causes significant disruption, shuts down production, or poses a safety risk (e.g., HVAC, fire systems, high-value machinery).
• Statutory Compliance: If regular inspections are required by law or to maintain warranties (e.g., gas safety, lifting equipment).
• Cost of Failure: If the cost of emergency repair, expedited parts, and lost production is higher than the scheduled service.
• Energy Efficiency: For HVAC or motor systems, regular cleaning and calibration can reduce energy consumption by 10-15%, often paying for the maintenance through utility savings.

Benefits of a PPM Programmer

• Reduced Long-Term Costs: Reactive repairs can cost 3 to 9 times more than planned work.
• Extended Asset Lifespan: Regular maintenance slows degradation, delaying capital replacement costs.
• Minimised Downtime: Scheduled maintenance occurs at convenient times, rather than causing unexpected business halts.
• Improved Safety: Regular checks decrease the risk of injuries caused by faulty equipment.

When to Consider Avoiding or Scaling Back PPM

• Low Criticality: If the asset is inexpensive to replace or fail-safe, and its failure does not impact daily operations.
• Over-maintenance: Roughly 30% of planned maintenance tasks are carried out too frequently, resulting in unnecessary downtime and waste.
• Random Failure Modes: If the asset’s failure is not age-related, condition-based monitoring might be more effective than a strict time-based schedule

The underperformance of a key service contractor can have severe consequences, ranging from immediate operational disruptions to long-term financial, legal, and reputational damage. When a vendor fails to meet agreed-upon Service Level Agreements (SLAs) or Key Performance Indicators (KPIs), it often triggers a chain reaction that affects project timelines, budget, and quality of work.

Key implications of contractor underperformance include:

1. Operational Disruptions

Production/Service Halts: Subcontractor or vendor failures can lead to production shutdowns, particularly if they are responsible for critical components or services.

Project Delays: Failure to meet deadlines results in delayed projects, which can incur higher financing costs and result in missed opportunities for the principal contractor or owner.

Increased Workload: Internal staff may be forced to spend time chasing the vendor, fixing work, or managing crises, pulling them away from strategic, value-driving tasks.

2. Financial Consequences

Budget Overruns: Substandard work requires rework, while delays increase costs, directly inflating expenses and reducing profit margins.

Lost Revenue: For projects relying on timely completion (e.g., retail spaces, housing), delays in opening or completion result in direct, often irreversible, losses.

Costs of Replacement: Terminating and replacing a contractor is an expensive and time-consuming process that often involves legal fees and higher costs for new contractors.

Service Credits/Penalties: While contracts may include service credits for poor performance, these rarely cover the full cost of the disruption and are intended as price adjustments.

3. Legal and Compliance Risks

Breach of Contract Disputes: Underperformance can trigger disputes regarding whether the breach is severe enough to warrant termination, often resulting in complex, costly litigation.

Regulatory Fines: If the contractor’s underperformance leads to safety breaches, violation of labour laws, or failure to meet environmental standards, the engaging organisation may face fines from regulatory bodies.

Liability Issues: If a contractor lacks proper, up-to-date accreditation or fails in safety duties (e.g., fire safety), the engaging company can be held liable for resulting damages or injuries.

4. Reputational and Relationship Damage

Damaged Brand Reputation: Poorly executed work or failures by a subcontractor often reflect directly on the main contractor or owner, damaging trust with end users and stakeholders.

Service charge caps are actively managed through budgeting in advance and regular monitoring closely against the lease terms. Recoveries are limited to the capped amounts, with any excess costs clearly identified and treated in accordance with the lease, ensuring transparency and compliance.

Yes. Managing Agent’s fees are correctly disclosed within the financial statements, in line with the TOE (Terms of Engagement). The fees are separately identifiable, supported by approved fee schedules, and recorded gross, ensuring transparency and compliance with relevant accounting and disclosure requirements.

Discrete Client Accounts ensure segregation of funds. Monies are protected by the RICS (Royal Institute of Chartered Surveyors) and FSCS (Financial Services Compensation Schemes).

VAT returns can be completed and submitted by a Property Management Accountant where the accounting system is fully integrated with HMRC’s Making Tax Digital (MTD) requirements. VAT returns are produced using Making Tax Digital-compatible software, with full digital records and reporting maintained in line with HMRC regulations. With the client’s formal authorisation, we are able to access HMRC systems via the Government Gateway to prepare, submit and manage VAT (Value Added Tax) returns on their behalf.