© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Why did the directors at Bankside Lofts Management go down the self-management path? What has been the experience of self-management so far? Will they stick with it? Can directors of other RMCs draw lessons from Bankside Lofts’ experience? By James Thomson
The directors of Bankside Lofts Management Limited terminated the contract with their property managers in mid-2004 and went self-managed from the end of September that year.
Reactions were mixed and varied from the sympathetic “That’s brave” to the less encouraging “You’re mad – I hope you have thought about the potential liabilities you are letting yourself in for?”
Developed by Manhattan Loft Corporation and designed by Piers Gough of CZWG, Bankside Lofts (above) comprises 129 flats and 120 car parking spaces in front of Tate Modern’s main western entrance. Built in 3 phases between 1995 and 1998, the block is a combination of converted and new buildings with retail and office units at ground level. The residents benefit from a head porter during the week and additional 24 x 7 security manning is provided by The Corps of Commissionaires.
Two factors have had a particular impact on the management of Bankside Lofts during its first 10 years. 90% of the flats were sold as shells, leaving the original purchasers to employ their own architect to design and fit them out; as a result the layout of no two flats is the same, which sometimes makes the managing of water leaks, for example, challenging. And the block was built under a design-and-build contract resulting sometimes in poor documentation when trying to resolve building problems.
When the last flat was sold in 1999, control of the RMC transferred automatically to leaseholders. However the RMC was facing a cash crisis because service charges had been higher than the sales agents’ estimates and, in the absence of answers to their questions, leaseholders held back payment.
Working with the property managers but also with their own professional advisers, the directors put in place a number of cost-cutting measures. They renegotiated the basis of commercial service charge apportionment, negotiated a contribution from the freeholder and communicated all these issues to leaseholders, explaining why withholding service charges was not a good way to resolve their concerns.
One consequence of the successful turnaround of the RMC finances was that the directors got used to taking a very hands on approach. They authorised payment of the monthly cheque run; involved themselves in the arrears collection process; wrote scoping documents for refurbishment projects; and prided themselves on identifying building faults their surveyor may have missed.
The RMC directors became increasingly dissatisfied with the performance of the existing manager. They were less frequently on site. Leaseholders reported slower response times. A new contract was discussed but never finalised. At the same time, the property managers themselves become frustrated at the level of detailed information requested by the directors. They felt disempowered and demotivated.
The RMC directors were keen to move away from the existing property managers. But they were held back by concerns about the work involved, especially educating the new managers about the historic building and management issues at Bankside Lofts. And there was somebody available to take on the property manager’s role.
For leaseholders, self-management held out the prospect of:
In short, leaseholders would be able to sleep easy at night. The expectations gap
This then had been the history and thinking which led the directors to leave their property managers. But at a deeper level, discussions with those property managers about a new contract had revealed a serious expectations gap between client and manager. This may be instructive to other RMCs unhappy with their managers.
For most owners at Bankside Lofts their flat is a major investment and for many it is their single largest asset. For the RMC directors property management meant:
This is the service the RMC board thought they were paying for. But the property managers knew that the fees they were receiving of approximately £210 per unit would provide little more than a basic administrative service.
This expectations gap only became apparent when the account director tabled his staffing and cost analysis for the Bankside Lofts contract Of his costs per unit of £250 (20% higher than the existing fee) 35% were attributed to bookkeeping and banking, 7 1/2% for preparing the budget and a further 10% for servicing 4 board meetings each year. I calculate that an average of 1 hour per leaseholder each year spent dealing with leaseholder enquiries would absorb another 12% leaving just 35% of the fee or £75 per unit each year to “manage” the property. This equated to 3 man hours per week which, based on my experience at Bankside Lofts, is inadequate.
In getting to grips with some of the management of the block, it has been a great advantage to live in and be familiar with the block. A couple of examples illustrate this.
When taking over the maintenance contracts, it became apparent that we would need to:
It also emerged early on that there was a state of near-anarchy in the block with regard to building alterations and under-lettings, both of which require licences under the Bankside Lofts lease. We have found it helpful that the manager lives in the block, is quickly made aware by the porter of leaseholders’ plans and can remind them of their obligations and help them to comply.
It is too early to say. We substantially under-estimated the work involved to bring management in-house, especially since we were learning on the job and setting up new systems. However, if the management of Bankside Lofts is in future once again outsourced, the RMC directors and manager will be able to go out to tender with a high level of knowledge of what is required from the property managers.
The key requirement is to have a suitable person available to take on the role on a full or part-time basis. However the directors and the proposed manager also need to address the raft of regulation covering residential block management.
n Legal: you will need a basic understanding of property law, land registration and conveyancing procedures. Unless your are a property lawyer, you will need to take legal advice in the specific areas of assignment, pre-contract enquiries, notices of assignment and the concepts of nuisance and quiet enjoyment between leaseholders, If you employ your porter or use contract staff, you will need some basic understanding of the principles of employment law including TUPE.
There are also some very practical matters. Unless you have an assistant who can do it, you will need to be familiar with spread sheets and e-mail and most important, able to master the intricacies of mail merge.
So if you are comfortable with the regulatory framework and have decided to take on the management what else should you bear in mind?
The extent of regulation, the absence of a conventional capital structure to cover risk and the lack of economies of scale mean that except for the smallest blocks self-management should not be a good option.
But the experience at Bankside Lofts suggests that, until ARMA members and professional property managers can ensure that they compare with an in-house manager in terms of local knowledge and service standards, there is still a place for self-management.
James Thomson is property manager at Bankside Lofts opposite Tate Modern in London. Formerly a banker in the city he was a director of the RMC before taking on the day-to-day management.