Terms of Appointment for the Management of a Block of Flats

The Client appoints the Agent to be its Agent to perform the Service and the Agent accepts such appointment.
The Royal Institute of Chartered Surveyors’ Terms of Appointment as attached shall apply as varied by this Agreement.

A: ‘The Client’

B: ‘The Agent’
Chelsea Residential Management Limited30 Thurloe StreetLondon Sw7 2LT

C: ‘The Property’ the subject of this Agreement

‘Property’ shall include any fixed equipment used within the property from time to time.

D: Term of Agreement: 12 months as from [ ]

E: Notice to terminate:  Three months written notice served by either party at any time

F: Visits (Clause 1.4): once every three months The Agreed Expenditure Limit (Clause 1..5): £ Accounting Period (Clause 1.13): one year ending on the 25th December in each year  Written statement of account (Clause 1.13): within 100 days of the end of the Accounting Period  Float (Clause 4.2):  none The Interest Rate (Clause 4..2): 2% above the base rate of The Royal Bank of Scotland  Client’s Authorised Person (Clause 4.3}:  to be nominated
The Basic Fee (Clause 5.1): (delete whichever bases are not to apply)  A Fixed Fee of £     per annum (VAT included) will be paid quarterly in Advance such fee rising annually in accordance with the yearly wage index.
The Agent will be entitled to retain any commission received by him or her in respect of the Property, without accounting to the Client.
Additional Charge Rates (Clause 5.2): The hourly rates for additional work charged by the hour to be: £130 plus VAT (to be increased annually in accordance with the wage index)
Terms of Appointment
The Agent will perform the Service with reasonable skill and care in accordance with the principles of good estate management for the Term and thereafter until terminated by Notice. The Agent accepts in consideration of the Basic Fee the following obligations in respect of the Property to be performed as agent of the client:
1.1 Service charges To send service charge statements to lessees and to use reasonable endeavours to collect service charges and any arrears and interest payable.
1.2 Notify overdue payments To report to the Client from time to time as to sums overdue from lessees.
1.3 Expenditure To pay (but only to the extent that the Agent is properly able to do so out of sums held) the following liabilities: a) council tax, general, water, sewerage and other rates, charges, assessments and outgoings, and charges for supply of utility services to the Common Partsb) insurance premiums; c) the cost of maintaining the Property; d) costs incurred in connection with persons employed; e) sums due under any service contract; f) any sums reasonably to be expended in an emergency; g) the fees due to the Agent; h) any bank charges; and i) any other liability arising in the usual course of management; provided that (subject to clause 1.2.18) the Agent shall not apply any funds obtained from lessees under the terms of any lease other than to expenditure permitted by such lease.
1.4 Visits a) To visit the Property as often as may be agreed in the Written Agreement to identify all obviously necessary works of repair and maintenance. b) To arrange such periodic health and safety, and fire risk assessments as the Agent shall reasonably consider are necessary (but the Agent is not required to advise on health and safety).
1.5 Notification of repairs in excess of the Agreed Expenditure Limit Except in case of emergency to notify the Client of all reasonably necessary works of repair and maintenance estimated to cost more than the Agreed Expenditure Limit of which the Agent is aware and (following agreement of the Agent’s responsibilities and Additional Charges) to instruct competent contractors to carry out the works and to administer the work of such contractors.
1.6 Repairs within the Agreed Expenditure Limit To instruct competent contractors to carry out all reasonably necessary works of repair and maintenance within the Agreed Expenditure Limit and to administer the work of such contractors.
1.7 Insurance To administer building and other insurance insofar as instructed and permitted by law to do so. If the Managing Agent places the insurance as broker and obtains a commission no charge is made in administering insurance claims. If the managing agent has not been instructed to broker the insurance, claims are charged at the prevailing hourly rate at the time.
1.8 Contracts To arrange on behalf of the Client and administer contracts for the supply of utility services, cleaning, lighting, gardening, security, safety and other services and facilities which the Client is liable under the leases to provide and for the operation, servicing and renewal of any fixed equipment (including without limit lifts and boilers).
1.9 Staff . To employ and administer all persons necessary in the Agent’s opinion to be employed in the management of the Property, to provide such persons with the required written particulars of employment and to dismiss any such persons (in consultation with the Client) insofar as it is reasonable to do so.
1.10 Notification of lack of funds To notify the Client immediately of any occasion when the Agent is unable to discharge any expenditure or is unable to instruct contractors in respect of works because of lack of funds.
1.11 Client bank accounts To maintain one or more bank accounts designated as Client accounts through which all Client monies are paid. Any interest accruing from such account shall be retained by the managing agent and will not be accountable to the client.
1.12 Estimate of expenditure To prepare and submit to the Client an estimate of expenses for each year and such estimate shall form the basis of operations for the management.
1.13 Accounts To prepare a statement of account for each Accounting Period (or part period prior to termination) showing all receipts and all expenditure by the Agent.
1.14 Evidence of expenditureWhen requested to do so by the Client and any others entitled to production, to produce any receipts, VAT invoices or other evidence of the expenses paid.
1.15 Give information to Client
1.15.1 To keep proper records and to supply (subject to an additional charge) copies or print-outs of such records to the Client or other persons authorised by the Client upon reasonable request.
1.15.2 To permit the Client’s chartered accountants or solicitors by prior appointment to inspect the Agent’s records specific to the Property.
1.15.3 To ensure that all information (including computer records) are secure and to comply with the Data Protection Act 1998 and to indemnify the Client against all claims and legal costs arising in respect of failure to comply with this obligation.
1.16 Dealings with lessees
To the extent that the Agent shall consider appropriate: 1.16.1 To deal with any reasonable enquiries made by lessees, any lessees’ association, or prospective lessees, or their respective professional advisers relating to the Property.
1.16.2 To consult with any residents’ or lessees’ association.
1.17 Breaches of lessees’ obligations Upon the Agent becoming aware of the same, to notify the Client of any apparent breach of any Lease or of any unlawful or suspicious acts relating to use or occupation and in all such cases to seek instructions from the Client before demanding or accepting rent or other sums due under any relevant Lease or otherwise treating such Lease as subsisting.
1.18 Compliance with legislation In carrying out the Services to comply with the provisions of all statutes and subordinate legislation and any codes of management practice required or provided for under any such legislation.
1.19 Legal proceedings Where legal action is required to enforce or comply with any rights of or obligations owed to the Client, to notify the Client as soon as practical and on receiving the Client’s instructions to do so to instruct the Client’s solicitors (or if none have been notified to the Agent other solicitors believed by the Agent to have the appropriate expertise) to act as they may advise.
2.1. The following services will be the subject of an additional charge either at a fixed fee, percentage fee or some additional charge rates:
2.1.1 Preparing specifications, obtaining tenders and administering works costing more than the Agreed Expenditure Limit.
2.1.2 Preparing statutory notices and dealing with statutory consultations.
2.1.3 Attending at courts and tribunals.
2.1.4 Advising on rating, planning, improvement, other grants and valuations.
2.1.5 Preparing replacement-cost assessments and handling insurance claims.
2.1.6 Considering leaseholders’’/tenants’ applications for alterations.
2.1.7 Advising on and dealing with assignments of leases, subletting, change of use and Home Information Pack requests.
2.1.8 Preparing schedules of dilapidation or condition for individual dwellings.
2.1.9 Copying documents, insurance policies and accounts.
2.1.10 Dealing with overseas telephone calls and faxes.
2.1.11 Providing information to facilitate sales of leasehold interests in individual dwellings .
2.1.12 Administering accommodation for meetings and inspections of documents.
2.1.13 Working outside normal office hours at the Client’s specific request.
2.1.14 Advising on termination of service contracts.
2.1.15 Carrying out duties of a company secretary.
2.1.16 Undertaking additional duties arising from any exercise by the lessees of their ‘right to manage’ or to form a common hold.
2.1.17 Advising on and dealing with long term maintenance plans.
2.2. Additional charges in excess of the Additional Charge Limit shall only be recoverable if agreed by the Client but the Agent shall not be required to provide any additional services without such agreement being confirmed in writing in advance.
3. Authorisations of the Agent by the Client
3.1. Expenditure within limits , To expend any sums that are either within the Agreed Expenditure Limit or considered necessary by the Agent in cases of emergency.
3.2. Expenditure to comply with law To expend any other sums necessary to ensure compliance with the law subject where practicable to prior consultation with the Client.  3.3. Reimbursement Whenever the Agent properly expends any sums under this agreement, to reimburse itself from any funds held by the Agent (including after termination).
4.1. To give information to the Agent
4.1.1 To provide (and as necessary procure that the Client’s previous agents provide) to the Agent all information and documents or copies of them which are in the Agent’s reasonable opinion necessary to provide the Service and to pay the Agent at the Additional Charge Rates for any work occasioned by any failure to do so.
4.1.2 To keep the Agent fully updated with any information relevant to the Property from time to time.
4.1.3 To give the Agent immediate notice of: -any claim for a right to manage; -an application to the Leasehold Valuation Tribunal; -the recognition of a residents association; and – any other notice which may go direct to the Client or any intention to sell all or part of the Property or extend or vary any lease.
4.2. Float for expenditure To pay the Agent the amount of the Float within seven days of this agreement and to pay any further sums requested by the Agent as necessary to maintain the amount of the Float held by the Agent.
4.3. To give instructions to the Agent
4.3.1 On request by the Agent to do so, promptly to give instructions and decisions in writing, or if given orally to confirm them in writing within seven days.
4.3.2 Not to give any instructions to the Agent which if complied with would involve a breach of clause 1.2.18 (Compliance with legislation).
4.3.3 The Client (if not an individual) shall from time to time in writing nominate an individual Client’s Authorised Person to give instructions to the Agent and shall confirm such appointment to the Agent.
4.4. To pay Fees
4.4.1· That the Agent is entitled to deduct sums from funds held but failing that the Client will pay to the Agent within seven days (without set-off or deduction):
4.4.1.1 The Fees set out in the Written Agreement;
4.4.1.2 All travelling and out-of-pocket expenses properly incurred; and
4.4.1.3 Any VAT chargeable in addition to the Fees.
4.4.2 To pay interest on sums overdue to the Agent at the Interest Rate.  4.5. Reimbursement of expenditure To reimburse the Agent for all expenditure properly incurred in the provision of the Services.
4.6. Indemnity To indemnify the Agent against any liability suffered by the Agent and legal fees and costs properly incurred in the course of providing the Services unless caused by the Agent’s negligence.
4.7. Ratification To ratify all acts, deeds and things properly done by the Agent in connection with the  provision of the Services.
4.8. Further indemnity That the Client will pay to the Agent within 14 days of a demand from the Agent:
4.8.1 Any sum paid or incurred in good faith by the Agent in connection with the management of the Property but which is judged by a court or tribunal to be irrecoverable from any or all lessees; and
4.8.2 Any sum representing service charge monies withheld by any or all lessees of the Property for whatever reason.
4.9. Temporary release of Agent To temporarily release the Agent from any obligation to provide any service during such times as the Agent holds insufficient funds to do so.
5.1. The basis or bases of the Agent’s remuneration as recorded in the written agreement between the parties (‘the Written Agreement’) shall apply.
5.2. Unless otherwise agreed in writing Additional Services shall be remunerated at the Additional Charge Rates plus travelling expenses.  5.3. Unless otherwise agreed, any Fixed Fee specified in the Written Agreement shall be adjusted annually on the Annual Rate Review Date in proportion to the change in the [Retail Price Index].
5.4. Hourly rates will be reviewed on the Annual Rate Review Date but in the absence of written agreement of any revised rates those applying immediately previously shall continue to apply.
6.1. Either party may terminate this Agreement by giving three months written notice at any time.
6.2. If at any time either party is in breach of this Agreement:
6.2.1 the other may serve on the party in breach written notice specifying the breach or breaches and requiring them to be remedied within 30 days; and 6.2.2 if the party in breach fails within 30 days of the service of such notice to remedy such breach or breaches; then
6.2.3 the party who served the notice may terminate the Agreement upon serving written notice to that effect on the other party.
6.3. If either party becomes insolvent the other party may end this agreement immediately by serving notice upon the other to that effect.
6.4. On termination of this agreement the Agent will within 7 days return to the Client all originals and copies of deeds relating to the Property and all other material relating to the Property necessary for the continuing management.
7.1. Unless caused by the Agent’s negligence the Agent is not liable for any loss or legal or other expenses sustained as a result of:
7.1.1 the Agent having reasonably relied upon the Client to provide accurately all relevant information;
7.1.2 any inaccurate forecast by the Agent of future income or expenditure;
7.1.3 any defect or failure to identify any defect in the Property or plant, machinery, equipment or materials used for the Property whether or not such defect be latent or apparent on examination;
7.1.4 the act, omission or insolvency of any person other than the Agent.  7.2. The Client shall indemnify the Agent in respect of any claims made by a third party for any loss, injury, damage or legal or other expenses referred to in Section 7.1 above.  7.3. In no circumstances shall the Agent be liable for any consequential loss or damage except where death or injury results from negligence on the part of the Agent.
8.1. Notices Any notice required to be given under this agreement must be in writing and served by delivery to the party concerned or (effective the following day) by sending it in a prepaid letter by registered post or recorded delivery to the party concerned at the address as given in this agreement or at any other address the party has notified in writing to the other party for the purpose.
8.2. Governing law This agreement shall be governed by and construed in accordance with English law.
8.3. Contracts (Rights of Third Parties) Act 1999 For the purposes of the Contracts (Rights of Third Parties) Act 1999 it is agreed that nothing in this agreement shall confer on any third party any right to enforce or any benefit of any term of this agreement.
8.4. Assignment This Agreement may only be assigned or transferred in whole or in part with the written consent of the other party thereto, and such assignment or transfer shall be varied only after written notice to that effect has been given.
8.5. Disputes The Agent will operate and notify to the Client an appropriate procedure for resolving complaints relating to the Agent’s performance of the Service.