Can We Change Managing Agents? Understanding the Legal and Practical Considerations

"Can we get rid of our managing agent?" 

The answer is often yes, but the route to achieving it depends on how the development is structured. Some developments can simply appoint a new managing agent. Others may need changes to company control, leaseholder action, or even a Right to Manage (RTM) application before a switch is possible.

Understanding the legal structure of your development is the first step. 

Not All Developments Are Structured the Same Way 

Many residents assume the managing agent is in charge of the development. In reality, the managing agent is usually appointed by someone else, such as: 

• A Resident Management Company (RMC)

• A Right to Manage Company (RTM)

• A freeholder

• A management company established by the developer

• A TP1 estate management company

The key question is: 

Who has the legal authority to appoint and dismiss the managing agent? 

Once that is identified, the pathway to change becomes much clearer. 

Scenario 1: An Existing Resident-Controlled RMC 

This is usually the simplest situation. 

Many apartment developments have a Resident Management Company named within the lease. The directors of that company have the authority to appoint and replace the managing agent.

 If resident directors already control the company, the process is generally: 

1. Review the management agreement.

2. Obtain alternative proposals.

3. Hold a directors' meeting.

4. Approve the appointment of a new managing agent.

5. Serve notice on the incumbent agent.

6. Complete the handover. 

In these circumstances, changing managing agents can often be completed within a few months. 

Scenario 2: The RMC Exists, But Is Still Controlled by the Developer 

This is common on newer developments.

A management company may have been established when the site was built, but the developer may still control the board of directors.

 This can happen because: 

• The development is not fully completed.

• The trigger for resident control has not yet been reached.

• Residents have not yet been appointed as directors.

• The developer has retained director appointments. 

In these circumstances, the issue may not be the managing agent itself. 

The real question may be: 

Who controls the management company? 

Residents may need to: 

• Review the Articles of Association.

• Understand the developer's obligations to transfer control.

• Request director appointments.

• Engage with Companies House records.

• Seek specialist legal advice if handover obligations are being delayed.

Once residents gain control of the company, they can often review the managing agent appointment. 

Scenario 3: The Managing Agent Is Also a Director 

Occasionally, residents discover that representatives of the managing agent are themselves directors of the management company.

 This is not automatically improper, particularly during a developer-controlled period, but it can create practical difficulties when residents wish to appoint an alternative agent.

Questions to consider include: 

• Who can appoint or remove directors?

• What do the Articles of Association say?

• Are residents members of the company?

• Is there a mechanism allowing resident directors to be appointed? 

The focus may need to be on changing company control before changing managing agents. 

Scenario 4: Leasehold Development With No Resident Control 

Some leasehold developments do not contain a resident-controlled management company at all.

 Instead: 

• The freeholder owns the building.

• The freeholder appoints the managing agent.

• Leaseholders have little direct influence over the appointment. 

In these cases, leaseholders cannot simply vote to replace the managing agent. 

However, there may be alternative options. These include: 

Right to Manage (RTM) 

The Commonhold and Leasehold Reform Act 2002 gives many qualifying leaseholders the right to take over management of their building without needing to prove fault by the freeholder. 

If successful: 

• The RTM company acquires management responsibilities.

• Leaseholders choose their own managing agent.

• The freeholder remains the landlord. 

For many blocks, RTM is the route that makes a managing agent change possible. 

Collective Enfranchisement 

Some leaseholders choose to purchase the freehold collectively.

This provides control over management and future appointments but is a more complex and costly process than RTM. 

Scenario 5: Freehold Housing Estates Subject to TP1 Obligations 

Housing estates are becoming increasingly complex. Many modern developments have communal areas such as: 

• Open spaces

• Play areas

• Sustainable drainage systems

• Private roads

• Landscaping

• Lighting 

Individual homeowners often contribute towards maintenance through obligations contained within their TP1 transfer documents. 

Typically there will be: 

• An estate management company.

• A managing agent appointed by that company.

• Service charge obligations enforceable through the TP1. 

The crucial question becomes:

Who controls the estate management company? 

Some estates eventually transfer control to homeowners.

Others remain under developer control for a prolonged period.

Some have constitutional arrangements that make resident involvement less straightforward than in traditional apartment blocks. 

Before discussing a managing agent change, homeowners should establish: 

• Who owns the management company?

• Who are the directors?

• Who are the members?

• What rights do homeowners possess?

• Has control transferred from the developer? 

Scenario 6: Mixed-Use and Complex Developments 

Developments with apartments, commercial units, shared podiums, parking structures or multiple management companies can be more complicated.

You may encounter: 

• Head management companies.

• Subsidiary management companies.

• Multiple service charge structures.

• Different parties appointing different agents. 

In these situations, replacing a managing agent requires a careful review of: 

• Leases

• Transfer documents

• Management agreements

• Company structures

• Corporate governance arrangements

A proper review at the outset can save significant time and expense later. 

Before You Start: Five Essential Checks 

Before launching a campaign to replace your managing agent, establish: 

1. Who Appoints the Managing Agent? This is the most important question of all.

2. Who Controls the Relevant Company? Directors and members may have different rights.

3. What Does the Lease or TP1 Say? The governing documents often hold the answer.

4. Are Residents Properly Represented? If not, obtaining representation may be the first objective.

5. What Is the Desired Outcome? Sometimes residents need:

• Better communication.

• Greater financial transparency.

• More director involvement.

A managing agent change may be the answer, but understanding the underlying issue is just as important. 

How Placekeeper Management Can Help

Every development is different.

We regularly speak to directors, leaseholders and homeowners who know they are unhappy with the current arrangements but are unsure whether a managing agent change is actually possible. 

Our team can help you understand: 

• Your development's legal structure.

• Who controls the management company.

• The options available to residents.

• Whether an RTM may be appropriate.

• How to transition to a new managing agent.

• What a realistic handover process looks like.

Sometimes the route is straightforward. Sometimes it requires a little more investigation. Either way, understanding the legal structure is the first step towards achieving better management.