What Does a Freehold Management Company Do?
Owning the freehold of a residential building brings control, but it also brings ongoing responsibilities. Shared areas must be maintained, service charge funds need to be managed and leaseholders must be kept informed about decisions affecting their homes.
So, what does a freehold management company do, and when is it helpful to appoint a professional managing agent?
A freehold management company oversees the shared financial, administrative, maintenance and compliance requirements of a residential building. Its precise role depends on the leases, the building's ownership structure and the agreed management contract.
For resident-owned freehold companies, a professional agent can manage much of the day-to-day workload while the directors retain authority over important decisions.
What Are the Main Responsibilities of a Freehold Management Company?
A freehold management company helps to organise and administer the shared responsibilities attached to a freehold residential building.
In practical terms, this can include:
- Preparing service charge budgets
- Issuing service charge demands
- Monitoring payments and expenditure
- Producing financial reports
- Arranging communal repairs and maintenance
- Obtaining and reviewing contractor quotations
- Supporting building insurance administration
- Keeping leaseholders informed
- Coordinating major works
- Helping the responsible parties follow consultation procedures
- Supporting resident directors with building-related administration
- Maintaining records relating to the management of the property
The answer to what does a freehold management company do will vary between buildings. A converted Victorian house containing three flats will not have the same requirements as a large purpose-built apartment block.
The lease remains central. It normally establishes which parts of the property are communal, which costs may be recovered through the service charge and how those costs should be divided.
Does a managing agent replace the freeholder or directors?
Usually, no. A managing agent acts on behalf of the freeholder, resident management company or Right to Manage company under an agreed management contract.
The freeholder or resident directors continue to make the decisions reserved for them. The agent provides professional administration, coordination and practical support to help carry those decisions out.
Looking for help managing a residential freehold?
W12 Property Solutions provides personal freehold property management services for freeholders and resident-owned companies across West and South West London.
Who Appoints a Freehold Management Company?
A freehold management company or professional managing agent may be appointed by the party with responsibility and authority for managing the building.
Depending on the ownership structure, this could be:
- An individual freeholder
- A company that owns the freehold
- The directors of a resident-owned freehold company
- A residential management company
- A Right to Manage company
- A developer or property investor
- Trustees or another party named within the building's legal arrangements
Who appoints an agent for a resident-owned freehold?
Where the leaseholders collectively own the freehold through a company, the directors will generally make decisions about its management in accordance with the company's articles, the leases and any applicable agreements.
The directors may choose to self-manage or appoint a professional freehold managing agent. Appointing an agent can be particularly useful when directors do not have the time, experience or impartiality needed to handle everyday matters themselves.
Can leaseholders appoint their own managing agent?
Individual leaseholders cannot usually appoint an agent to take over the whole building without the necessary legal authority. However, leaseholders may gain management powers through a resident management company, collective ownership of the freehold or the Right to Manage process.
The building's leases and ownership structure should always be checked before changing the management arrangements.
What Does a Freehold Manager Do With Service Charges?
One of the most important freehold management company responsibilities is administering the service charge in accordance with the leases and the relevant requirements.
Service charges are commonly used to meet the cost of maintaining, repairing, insuring and managing the shared parts of a residential building. The costs that can be recovered will depend on the wording of each lease.
How does freehold service charge management work?
Professional freehold service charge management may include:
- Reviewing the services and works required by the building
- Preparing a budget for the service charge period
- Apportioning charges in line with the leases
- Issuing demands at the appropriate times
- Monitoring payments received
- Recording invoices and expenditure
- Reporting to the directors or freeholder
- Preparing year-end information for the relevant accountant
- Monitoring reserve or sinking funds where applicable
- Following an agreed process when payments become overdue
A managing agent should not decide how charges are divided based simply on what appears fair. The lease will normally state whether a leaseholder pays an equal share, a fixed percentage or another specified proportion.
What can a residential service charge cover?
Subject to the lease, a service charge might contribute towards:
- Buildings insurance
- Roof and external wall repairs
- Cleaning and lighting communal areas
- Gardening and grounds maintenance
- Door-entry or access systems
- Communal electricity
- Fire safety measures
- Gutter, drainage and rainwater repairs
- Professional fees
- Managing agent fees
- Planned major works
- Contributions to a reserve fund
A good manager helps directors understand both the building's expected expenditure and the terms under which the costs may be recovered.
What Financial Reporting Does a Freehold Management Company Provide?
When considering what does a freehold management company do, it is important to look beyond collecting service charge payments. Accurate financial administration helps the freeholder or directors understand the building's current position and prepare for future expenditure.
The reporting provided will depend on the management agreement, but it may include:
- Service charge income and expenditure reports
- Updates on outstanding payments
- Copies or records of contractor invoices
- Budget comparisons
- Reserve fund balances
- Major works expenditure
- Year-end financial information
- Supporting records for service charge accounts
Why is financial transparency important?
Leaseholders want to understand how their money is being used. Directors also need reliable information before approving repairs, choosing contractors or committing the building to longer-term costs.
Clear reporting allows decisions to be based on the building's actual financial position rather than assumptions.
Does the managing agent prepare company accounts?
Not necessarily. Service charge administration and statutory company accounts are related but separate areas.
An accountant may still be required to prepare or review the relevant accounts. The managing agent can organise financial records and liaise with the appointed accountant, but the exact division of responsibility should be stated in the management agreement.
Does a Freehold Management Company Arrange Maintenance and Contractors?
Yes. Arranging maintenance and coordinating contractors are common parts of a managing agent's role.
When someone asks what does a freehold management company do about repairs, the answer can cover everything from responding to a leaking gutter to planning extensive roof or external decoration works.
What types of communal maintenance can an agent coordinate?
Depending on the property and the lease, maintenance may involve:
- Communal hallways and staircases
- Roofs, gutters and downpipes
- External brickwork and render
- Shared windows and entrance doors
- Gardens, paths and boundary areas
- Drainage and shared pipework
- Communal lighting
- Door-entry systems
- Fire safety equipment
- Internal and external redecoration
How are contractors selected?
A freehold managing agent can help define the required work, approach suitable contractors, obtain quotations and present the options to the responsible decision-makers.
The agent may also:
- Check whether contractors hold appropriate insurance
- Confirm the proposed scope of work
- Coordinate access to the building
- Keep residents informed about schedules
- Monitor progress
- Record invoices and approvals
- Raise concerns about incomplete or unsatisfactory work
The freeholder or directors may still approve the contractor and expenditure, particularly for significant projects.
Can a managing agent prevent every maintenance problem?
No. Some problems occur suddenly and defects may remain hidden until damage appears. However, organised inspections, maintenance records and timely action can reduce the risk of minor issues developing into larger, more disruptive repairs.
How Does a Freehold Management Company Help With Compliance and Section 20?
A managing agent can help the freeholder or resident directors organise building-related compliance tasks, maintain records and coordinate suitable professional advice.
It is important to distinguish between administration and specialist professional services. A managing agent may coordinate a fire risk assessor, surveyor, engineer, solicitor or other specialist, but should not present itself as providing advice outside its competence.
What compliance matters may require coordination?
The relevant requirements depend on the building, but management may involve arranging or monitoring:
- Building insurance
- Fire risk assessments and recommended actions
- Communal electrical inspections
- Fire alarm or emergency lighting servicing
- Health and safety assessments
- Asbestos-related information where relevant
- Lift inspections and servicing
- Water hygiene measures
- Company records and filing dates
- Statutory consultation for qualifying works or agreements
What is Section 20 consultation?
Section 20 is the commonly used name for the statutory consultation process that may apply before a landlord carries out qualifying works or enters into certain long-term agreements where the cost to leaseholders exceeds the applicable thresholds.
For qualifying works, consultation is generally required where any one leaseholder's contribution will exceed £250. For a qualifying long-term agreement, the general threshold is more than £100 per leaseholder in an accounting period.
The procedure and notices required depend on the type of work or agreement. The freeholder or directors should obtain appropriate legal or professional guidance where necessary.
What does the managing agent do during major works?
Depending on its appointment, the agent may:
- Help identify the proposed scope
- Coordinate surveyors or other specialists
- Obtain quotations or tenders
- Issue communications and notices
- Record observations received from leaseholders
- Keep directors updated
- Coordinate access and scheduling
- Monitor the budget and invoices
- Provide progress updates to residents
The agent acts for the responsible client, but the legal responsibility for following the correct procedure does not automatically disappear when an agent is appointed.
Need help coordinating the responsibilities attached to your building?
Speak to W12 Property Solutions about professional block and freehold management shaped around your leases, ownership structure and priorities.
How Does a Freehold Management Company Communicate With Leaseholders?
Communication with leaseholders is an important part of managing a shared residential building.
Knowing what does a freehold management company do is not only about finances, maintenance and paperwork. A manager also provides a central point of contact through which building matters can be reported, explained and followed up.
What information should leaseholders receive?
Depending on the situation, communication may cover:
- Service charge budgets and demands
- Planned maintenance visits
- Contractor access
- Emergency repairs
- Major works proposals
- Section 20 notices
- Changes affecting communal areas
- Building insurance information
- Relevant safety inspections
- Updates on reported problems
How can communication reduce disputes?
Many disagreements become more difficult when residents do not know what is happening, why a repair has been delayed or how a decision was made.
Clear communication cannot guarantee that everyone will agree. However, it can give leaseholders a better understanding of the leases, costs, available options and reasons behind a decision.
A professional agent can also introduce a helpful degree of separation where resident directors find it uncomfortable to pursue payments, respond to complaints or explain unpopular but necessary expenditure to neighbours.
How Does a Managing Agent Support Resident Freehold Company Directors?
Managing resident-owned freeholds can place a substantial workload on directors, particularly when those directors are also neighbours, homeowners and volunteers.
They may need to deal with maintenance decisions, service charge collection, contractor performance and leaseholder concerns while also meeting their obligations as company directors.
What does a freehold manager do for resident directors?
Support can include:
- Organising day-to-day building administration
- Preparing information for board decisions
- Keeping records of agreed actions
- Producing financial updates
- Monitoring maintenance matters
- Communicating with leaseholders
- Obtaining contractor quotations
- Coordinating professional advisers
- Tracking recurring inspections and servicing
- Helping directors plan future expenditure
Do resident directors remain in control?
Yes, where the management agreement is structured on that basis. The purpose of appointing an agent is not necessarily to remove control from residents. It is often to give directors better information and practical support so that they can make informed decisions.
The management agreement should clearly identify:
- What the agent can approve
- Which decisions require director approval
- Any financial authorisation limits
- Reporting arrangements
- Meeting requirements
- Emergency procedures
- The services included in the management fee
A clear division of responsibilities helps both the directors and the agent understand what is expected.
What Does a Freehold Management Company Do for Victorian Conversions?
For period properties, what does a freehold management company do differently? The basic principles remain similar, but the building's age, construction, layout and conversion history can make its management more complex.
Victorian and Edwardian houses were not generally built as self-contained flats. After conversion, several homes may depend on the same roof, external walls, drainage, entrance, garden and internal services.
Which issues commonly affect converted houses?
A Victorian conversion may require particular attention to:
- Ageing roofs and chimney stacks
- Brickwork, pointing and external render
- Timber windows and structural elements
- Gutters, downpipes and drainage
- Damp, condensation and penetrating moisture
- Shared entrance halls and stairways
- Fire doors and escape routes
- Gardens and boundary responsibilities
- Shared or unusually routed pipework
- Sound transfer between flats
- Older repairs carried out using unsuitable materials
Why can the leases be especially important?
Converted buildings do not always have simple or uniform layouts. The leases may treat similar-looking areas differently, and the boundary between a flat and the communal structure may not be immediately obvious.
Before allocating a repair or its cost, the responsible parties may need to establish:
- Whether the affected area is demised to one flat
- Whether it forms part of the retained structure
- Who has the obligation to repair it
- Whether the cost is recoverable
- How the expense should be divided
- Whether consultation is required
W12 Property Solutions provides specialist Victorian conversion block and freehold management for period residential buildings across West and South West London.
Discuss the management of your converted property
If your building has shared maintenance concerns, unclear responsibilities or directors who need more day-to-day support, contact W12 Property Solutions to discuss its current arrangements.
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What Is Not Included in Freehold Property Management?
The answer to what does a freehold management company do should always be considered alongside what it has not been appointed to do.
Not every task connected with the freehold will automatically be included in a standard management service.
Which services may require separate instruction or fees?
Depending on the agent and management agreement, additional services may include:
- Major works project management
- Section 20 consultation administration
- Lease extension matters
- Licence to alter applications
- Company secretarial work
- Debt recovery and legal action
- Tribunal or court proceedings
- Insurance claims
- Professional surveys
- Fire risk assessments
- Structural or engineering advice
- Valuations
- Accountancy work
- Out-of-hours emergency attendance
Some of these tasks may be handled by the agent for an additional fee, while others require an independent surveyor, accountant, solicitor or specialist contractor.
What should you check before appointing an agent?
Ask for a written proposal that explains:
- The services included
- The management fee
- Any additional charges
- Financial approval limits
- Reporting frequency
- Emergency arrangements
- Contractor procurement procedures
- The length of the agreement
- Notice and termination provisions
- The responsibilities retained by the client
Understanding the scope from the beginning helps prevent uncertainty later.
Where Can I Learn More About Block and Freehold Management?
Freehold management is closely connected with residential block management, lease obligations, service charges and the structure through which a building is controlled.
If you would like a broader explanation of the different arrangements, read W12 Property Solutions' complete guide to block and freehold management
The guide explains how block and freehold management works, who may be responsible for appointing an agent and what resident directors should consider when reviewing their current arrangements.
Frequently Asked Questions About Freehold Management Companies
What does a freehold management company do on a daily basis?
A freehold management company deals with the agreed day-to-day administration of a residential building. This may involve responding to maintenance reports, contacting contractors, checking invoices, monitoring service charge payments, updating directors and communicating with leaseholders.
Not every task occurs every day, but the agent maintains an organised structure through which building matters can be recorded and progressed.
What are the main freehold management company responsibilities?
The main freehold management company responsibilities commonly include service charge administration, financial reporting, maintenance coordination, contractor management, leaseholder communication, record keeping and support with agreed compliance matters.
The precise responsibilities should be confirmed in the management agreement and must be considered alongside the leases.
What is the difference between a freeholder and a freehold managing agent?
The freeholder owns the freehold interest in the building. A freehold managing agent is appointed to perform specified management duties on the freeholder's or management company's behalf.
Appointing an agent does not transfer ownership of the freehold.
Is a freehold management company the same as a residential management company?
Not always. The language can be confusing.
A residential management company is often a company named in the leases with responsibilities for managing the building. A freehold company may own the freehold, sometimes on behalf of participating residents. A professional managing agent is an external business appointed to undertake agreed management work.
In some buildings, the same resident-owned company both owns the freehold and has management responsibilities. The legal documents should be checked to confirm the arrangement.
Do resident-owned freeholds need a managing agent?
There is not always a requirement to appoint one. Some small buildings successfully self-manage.
However, a professional agent may be valuable where:
- Directors have limited time
- Maintenance is being delayed
- Service charge collection is inconsistent
- Financial records are unclear
- Major works are approaching
- Leaseholders are in dispute
- Directors want a neutral point of contact
- Compliance administration has become difficult to monitor
Can a freehold management company collect service charges?
Yes, where it has been authorised to do so. The agent may prepare budgets, issue demands, record payments and monitor outstanding balances.
Charges must be administered in line with the leases and relevant requirements. Appointing an agent does not create a right to recover costs that the leases do not allow.
Who decides how service charge money is spent?
The freeholder or resident directors usually retain decision-making authority, subject to the leases, legislation and the terms of the agent's appointment.
An agent may have permission to approve routine expenditure up to an agreed limit. Larger or unusual costs commonly require client approval.
Does a freehold manager arrange building insurance?
A managing agent may obtain quotations, administer renewals and provide leaseholders with relevant policy information when this is included in its appointment.
Responsibility for insuring the building and recovering the cost will depend on the lease. Contents insurance for individual flats is generally a separate matter for each leaseholder.
Can a managing agent deal with unpaid service charges?
A managing agent can monitor arrears, issue reminders and follow the agreed recovery process. If payment is still not made, the freeholder or management company may need advice from an appropriate legal professional.
The procedure must be handled carefully because service charge recovery is governed by the lease and relevant legal requirements.
How much does a freehold management company charge?
Fees depend on factors such as:
- The number of flats
- The age and condition of the building
- The level of service required
- The complexity of the leases
- The extent of the communal areas
- Current maintenance or compliance issues
- The reporting expected by directors
- Whether major works are planned
A tailored proposal is more useful than judging an agent by the basic management fee alone. It should explain what is included and identify tasks that may attract additional charges.
What should I look for in a freehold managing agent?
Look for an agent that takes time to understand the leases, ownership structure and condition of the building. Clear reporting, responsive communication, transparent fees and practical experience of similar properties are also important.
For resident-owned buildings, directors may prefer an agent that supports their decision-making rather than applying an inflexible management model.
Looking for a Freehold Management Company in West London?
Now that we have answered what does a freehold management company do, the next question is whether your building has the right level of support.
W12 Property Solutions offers a personal approach to freehold and residential block management. We work with individual freeholders, resident-owned freehold companies, RMCs and RTM companies across Wandsworth, Battersea, Putney, Chelsea, Hammersmith, Chiswick, Ealing, Fulham, Clapham and selected areas of Surrey.
Our service is shaped around the building, its leases and the support its responsible parties need. This includes specialist experience with Victorian and Edwardian residential conversions.
Talk to W12 Property Solutions About Your Building
Tell us about your building, its ownership structure and any current management concerns. We can discuss the responsibilities you would like help with and whether our approach is suitable for your property.