The Director’s Cut - Choosing a Managing Agent: A step-by-step guide for RMC & RTM directors

Many boards assume that running a tender is simply a matter of asking a few firms to quote and comparing proposals.

In reality, selecting the right managing agent is not simply a procurement exercise. It is a governance decision, and one that shapes how effectively your building is maintained, how transparently funds are handled and how well statutory duties are met.

For directors approaching this process themselves, the following structured approach can help.

Step 1: Start with the building, not the market

The instinctive first move is often to ask: Which agents should we invite?

A more productive starting point is to ask what your building actually needs from its next agent.

Is the focus on technical strength because major works are approaching?
Is building safety compliance becoming a growing priority?
Is the board seeking stronger financial discipline or better communication?

Until you define the nature of the support required – now and in the medium term – it is difficult to judge which firms are even relevant.

Step 2: Understand the shape of the market

The managing agent sector is evolving rapidly. Alongside long-established independent firms now sit regional specialists, boutique operators and increasingly, larger consolidated groups.

Each operates differently. Some are structured for scale and process. Others prioritise relationship-led service. Some are particularly strong with Higher-Risk Buildings, while others excel with smaller resident-led developments.

Without an informed view of this landscape, many boards default to familiarity – approaching whoever manages a nearby block or whoever appears most visible online.

Longlisting is not simply about finding available agents. It is about identifying those whose operating model genuinely aligns with your building.

Step 3: Look at their accreditation

In an industry that remains largely unregulated in England and Wales, voluntary professional standards carry weight.

Directors should consider:

• Membership of The Property Institute (TPI) – both at corporate and individual level

• Regulation by RICS (corporate and individual)

• FCA permissions relating to insurance activity.

These credentials do not guarantee excellence, but they do indicate competency and a willingness to submit to oversight. Their absence should always prompt further enquiry.

Step 4: Examine the infrastructure

Service delivery is increasingly shaped as much by systems as by people.

Behind every well-run development sits an operational backbone – the mechanisms through which finances are reported, consultations are managed and compliance is evidenced.

Boards should take time to understand how an agent:

• manages financial reporting and arrears

• administers statutory consultations

• stores compliance documentation

• communicates with directors and residents.

Agents investing in integrated systems tend to be better equipped to deliver transparency and consistency, particularly in the context of building safety obligations.

Step 5: Structure the tender

A meaningful Invitation to Tender (ITT) does more than request a fee proposal.

It should enable the board to understand how each firm proposes to operate and manage risk.

At a minimum, this usually involves:

• a technical questionnaire

• a consistent fee framework

• clarity around staffing structures

• disclosure of insurance arrangements

• explanation of compliance processes.

Without this structure, comparisons can quickly become misleading.

Step 6: Test the detail

Written submissions rarely tell the whole story.

Directors should probe how the service would actually be delivered. Questions around team structure, escalation routes and portfolio sizes can reveal far more than marketing material.

This is often where differences between firms begin to emerge.

Step 7: Interview for alignment

Interviews should be treated as conversations rather than presentations.

Technical competence is essential, but so is compatibility. The working relationship between agent and board is ongoing and occasionally demanding. Cultural alignment can make the difference between collaboration and friction.

Step 8: Focus on the agreement

Selection often absorbs most of a board’s attention, leaving the management agreement lightly reviewed.

Yet this contract defines expectations, accountability and reporting.

Clarity around responsiveness, financial controls and transparency can prevent many future frustrations.

Step 9: Recognise the limits of DIY

On paper, an RMC or RTM board can absolutely run this process themselves.

You can define your needs, issue a tender, conduct interviews and negotiate terms. Many do – and with the best of intentions.

In practice, however, most boards discover that the greatest challenge is not managing the mechanics of a tender, but knowing:

• which agents should be approached in the first place

• what genuinely good management looks like today

• where the risks sit beneath a polished proposal.

Market visibility is uneven. Some of the strongest operators are not the most visible, while some of the most visible may not be best suited to your building’s needs.

This is where many well-run tenders still produce disappointing outcomes.

It’s not because the board failed to run the process correctly; it’s because the shortlist itself was built on incomplete intelligence.

Choosing a managing agent is ultimately about alignment – between your building’s needs and an agent’s capabilities.

A structured approach will always help.

But knowing who truly belongs on the shortlist is often the most important step of all.

And just as important is knowing what warning signs to watch for along the way.

In a companion piece, 10 Red Flags When Choosing a Managing Agent, I explore some of the behavioural and operational warning signs that should give any board pause before signing.

Because while appointing the wrong agent is rarely done intentionally, it is often done unknowingly.

About the Author

Jonathan Channing is an independent property management consultant working across the residential leasehold sector. A Fellow of The Property Institute (TPI), an Associate of RICS and an Honorary Consultant to the Federation of Private Residents’ Associations (FPRA), he also co-founded Proper Talk, the industry panel discussion series. Jonathan serves as an RMC director for two residential developments himself and regularly supports RMCs, share of freeholders and RTM companies in sourcing, assessing and appointing managing agents – helping boards navigate the market, structure tenders and make informed governance decisions.