Managing agent not handing over information or funds?

It is still surprising how common it is for residents to come to us with concerns about delaying tactics and deliberate incompetence when changing agent. Often residents fear that they may simply never obtain the information they require to properly manage their building or estate. But what can you do if you have had enough of your old agent, and they are not forthcoming providing all the documents you need?

Why do agents delay?

The first point to consider is why a managing agent may delay the handover process. In many cases it can be a fairly simple issue, often related to the reason they were not performing in the first place - not enough staff to prepare the documents, insufficient staff training to properly handle the information. Perhaps even begrudging a lost client and preferring to focus attention on other clients and tasks.

Sometimes though it can stem from misunderstandings, anything from understanding what documents have been requested or might be needed to a lack of knowledge of the law and ownership. This usually appears when agents decline to relay certain information because of GDPR, though in fact all information processed on behalf of a client or property belongs to that specific client - the agent only acts on their behalf, in accordance with the management agreement.

Very rarely an agent may deliberately or maliciously obstruct access to information. This is most often when they have not done something properly - perhaps failing to carry out agreed works, not fully accounting for finances or even breaches of contract or legislation. By sharing that information with the client and potentially a new agent, they risk accusations and possibly legal action.

Can my new agent deal with it for me?

Yes and no. While your new agent normally handles the transfer, and does not require you to review all the information before passing it on, they are limited in what they can do to enforce the handover. If the old agent is not forthcoming, the new agent does not have any contractual agreement with them to then take enforcement action and ensure that your data gets forwarded. They also do not have the financial investment in your property to then incur lots of fees for recovery - your new agent may well be replaced 6 months later, so it wouldn't make sense for them to spend a lot on money on enforcement for you.

But where do I begin?

As always, communication is key. The best place to start is simply talking to your old and new agents. Keep in touch with your new agent to see what has progressed and what has not been provided, and of course keep talking with your old agent to try and keep on amicable terms, as well as understand what will be available and when. Even though you may not be happy with the service you received, it doesn't mean you cannot be polite and civil with your old agent - which the vast majority of professionals will be with you too.

You will also find each agent has their own process and timeframe for this type of transition, so communicating with them throughout will give you more realistic expectations of their exact process, as well as how well they are working through other similar matters.

Assuming you are reading this article because that communication has been unsuccessful, the next step tends to be a complaint to escalate the issue. Once you have complained to the company itself (the timing of which largely depends on the companies own process) you can then escalate to progression bodies like The Property Institute or RICS. These organisation hold their members to specific standards, and agents risk expulsion if they do not comply.

Failing that, agents will belong to redress schemes such as The Property Ombudsman or The Property Redress Scheme. Lodging a complaint through the professional redress scheme will not only add pressure, but provide an impartial review of the actions (not) taken.

Court action - contract

Fundamentally the obligation for handover will be set out in the management agreement, and any failure to comply becomes a breach of contract. As the client, you can take legal action for breach of contract, both to require the provision of information and funds as well as losses or damages that may arise; for example duplicated management fees or professional fees as a result of information not handed over, or increased costs and remedial works for delayed major works projects or increased deterioration resulting from delays.

Court action - negligence

Companies have a duty of care to their clients, and must act with reasonable skill and competence in performance of their duties. Arguably a failure to provide essential information or funds does not meet this criteria, and can fall under a negligence claim.

In either case, it is important to document both requests for information and responses, as well as any resulting issues or delays that may arise. This would be needed to demonstrate any losses stemming from the lack of completed transition.

Next steps

If you are struggling to get information from your previous agent, you can review a more detailed article from KDL Law which explains the process for recovering your information and funds. If you have ongoing issues with the agent, get in touch with our team to see how we can help to navigate challenging handovers and liaise with agents for a more amicable transition.