Block Management: Why suppliers are so important to property managers

Never before have suppliers to the residential block management sector made more of an effort to get close to the action. Maintenance contractors, accountants, lawyers, health & safety experts, utility consultants, insurance brokers – they are at every conference, seminar, awards evening…How has this come about and why is this of interest to property managers?

Well, it goes without saying that property managers need their suppliers, despite clients thinking the managing agent can do it all! Property managers rely on their suppliers, they lean on their suppliers, and they’re only as good as their suppliers.

Indispensable

Contractors in particular realise how indispensable they can be if they do a good job, consistently, and at reasonable prices.

Property managers love using contractors who make them feel like the only property manager in the world. They’ll seemingly drop what they’re doing and react fast to get a property manager out of a hole.

Consolidation

Whilst RMC directors and leaseholders in general want to see jobs spread amongst multiple suppliers presumably to ensure fairness and remove any suspicion of under-handedness, this is counter-productive. Maintenance contractors like CIAR for instance – we hear from heads of block management regularly that they have far too many contractors on their books, partly because new contractors automatically come on board when new properties join the portfolio, and partly because the introduction of new contractors by property managers is too easy.

However, we are seeing that an increasing number of block management companies are rationalising. They see that they have perhaps 1000 contractors on their books and realistically, they probably need 5-10% of that total depending on the geographical areas they work within.

Block management companies are only just starting to take the lead from the retail and office sectors. These sectors are far more inclined to put their eggs in fewer baskets, so there are fewer contractors for commercial property managers to manage which in turn means less work vetting their insurance, H&S and SafeContractor credentials. Property management companies serving the retail sector may use one cleaning company and one electrical contractor for their entire portfolio. Shouldn’t the residential sector follow suit? Yes, of course they should.

There ARE signs that managing agents are speaking to their clients about consolidation, reassuring them that there are no ‘financial arrangements’ in place and that they are merely streamlining to achieve economies of scale for the service charge payers, encouraging greater loyalty from the contractors, and frankly to make their role more manageable.

Contractors – and all suppliers who can deliver in volume – are seeing the ‘consolidation’ signs too, and that makes them even more willing to get closer to managing agents.

Understanding the block management sector

Suppliers have made significant efforts to understand the industry. When I was running a managing agent (before I founded CIAR in 2012), I am not sure many contractors understood the freeholder-leaseholder relationship, let alone the nuts and bolts of ‘section 20’. Nowadays, we see fellow suppliers at the ARMA Conference or the IRPM Seminar, actively learning, not just taking a general interest.

This applied knowledge of the sector is helping the best suppliers to stand out, impress the property management community, and convince that they are well placed to serve the agent and their clients. The more that suppliers learn about the sector, the more confident they are of delivering the type of service managing agents need.

CPD

Suppliers now realise how much they can offer so they willingly deliver engaging presentations to property managers. Whether these are on the latest leasehold case law, licence to alter, insurance regulation or asbestos awareness, property managers are taking full advantage of the suppliers’ efforts to educate.

IT

Putting aside the significant investment in time suppliers make for organised events and socially too, suppliers now interact with property managers online, increasingly via the managing agent’s chosen portal to receive job orders and upload corresponding invoices. Contractors are now embracing the managing agent’s chosen proptech solutions to everyone’s benefit.

CIAR

CIAR is a cleaning and maintenance contract run by ex MIRPM property managers. We get it. Being a real part of the residential block management industry is not only rewarding, it’s essential. We need each other – seriously. Call us.

Lee Boquan is founder and managing director of CIAR.

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