Questions put to Hyphen from Residents in advance of the EGM.
Will Hyphen charge buy-to-let Landlords a 'sub-letting fee'?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) Hyphen has agreed with the Board of Directors that we will charge a fee of £50 + VAT (£60), with half of that fee being put back into Newland Gardens Management Company’s service charge fund for disposal of any rubbish left/damage to stairwells on tenants moving in or out.
Why are we only being given a single option with such short notice and what process have the RTM directors gone through to identify other managing agents? Which other managing agents were considered?
(response given by Board of Directors) The original email gave people three weeks’ notice of the EGM. In our judgment, this was an appropriate length of time. Many residents have expressed strong feelings, particularly at the last AGM, at their frustration with the continual rise in service charges. They don’t want us to delay. However, we have not undertaken this lightly. The process began in January and if Hyphen receives the majority of votes cast then they will not take over the account until July at the earliest.
We considered one other alternative, MCS and decided Hyphen was our preferred choice. The Directors are not experts. We are volunteers working in our own time. We have however consulted extensively with one of the former Directors who still lives on-site and who led the transition from the original Managing Agents (Peverel) to W.E. At the beginning W.E. provided a good service and made inroads into the cost base. They have been a very successful company over the last 10 years and have grown considerably. We are no longer a large account for them, and it shows. For this reason, we wanted a company that was locally based and committed to service excellence over growth. Hyphen met these criteria.
As I said we are not experts in this area. If you feel you have the experience that would benefit our community of residents, we would welcome you standing as a Director at our next AGM (usually every September although that may be different this year depending on the transition to Hyphen and/or the status of Coronavirus restrictions by that date).
Have any incentives been offered by Hyphen to get this contract?
(response given by Board of Directors) Absolutely no incentives have been offered to Hyphen or by Hyphen. The only benefits from the transition to Hyphen from W.E will be felt by the community at large as and when Hyphen deliver on their plans for reducing our overheads.
What other sites are Hyphen currently managing/have you seen signed contracts and references for other sites as I note the company was only set up in October 2019?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) This is a question that we are regularly asked, and I often wonder why a Managing Agent is judged on the size of their portfolio. I think the answer is that most Managing Agents market their service by boasting the size of their portfolio, but often, this is the exact reason why service levels are so dire. Whilst you can certainly grow your workforce in an attempt to remain on top of the demand, I have seen first-hand how difficult, and expensive, recruitment in this industry can be as the industry is very high in staff turnover. Many Property/Account Managers remain in their role for a very short period of time and skip between employment as it is common knowledge that when a Property Management firm is recruiting, it is often due to extreme pressure from demand, and many will recruit instantaneously based only on qualifications, without completing a proper character-assessment or conducting a second and third interview.
As you know, we have set a cap of twenty buildings to our portfolio. This is (a), and most importantly, because we simply do not need to be competing in terms of quantity, but rather our priority is quality. And (b) because this model allows us to assess and plan in a controlled manner whereby, we are not placed in desperate need to recruit. The eventual plan is to employ four full-time Property/Account Managers, alongside myself, as I plan to remain ‘hands-on’ for good.
I have provided you with one testimonial to date, but if you wish, I am quite happy to obtain two or three more if that would bring greater comfort. Unfortunately, we are not permitted to issue copies of agreements to anyone who is not an executing party of that agreement.
What industry qualifications do the directors have and what industry associations/insurances does Hyphen have?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) At this moment in time, I am the sole Director of Hyphen Property Management Limited. I currently hold Associate status with the Institute of Residential Property Management and am currently awaiting the results of a recent examination that would see me climb to upper Membership level. Many Property/Account Managers will not further study past Associate level with the IRPM as, really, further progression past this point is not a requirement of the industry. Once Membership level is achieved, I am able to take a further examination to achieve Associate level membership with the Royal Institute of Chartered Surveyors.
Holding fire safety in the highest regard, I am also a Technician with the Institute of Fire Safety Managers, meaning that I am able to demonstrate a safe knowledge in fire safety procedures. I am juggling the progression of this membership status alongside progressing with the IRPM, RICS, and CIOB (Chartered Institute of Builders).
The most recognised company affiliation in our industry is ARMA-Q. Many agents will also have RICS affiliation, which for us is currently not possible. Both ARMA-Q and the RICS require a minimum term-of-trading of two years. However, I am able to confirm that we do have outstanding applications in place in order that we are adequately braced to press on with finalising our applications as soon as we are able to do so. Until then, we will continue to uphold the standard of service expected under the ARMA-Q and RICS regulations.
With regards to insurances, our professional indemnity cover provides cover up to £2m. We also have fidelity insurance protecting each of our clients’ money to the tune of £1m. Barclays Bank recognise us as holding our client funds in trust within ring-fenced client trust accounts in accordance with Section 42 of the Landlord & Tenant Act 1987. Now that we have this recognition from a large high-street bank, we are further pushing the boundaries to ensure that our clients rest assured that their money is in safe-hands by implementing a client money protection scheme with Client Money Protect, following which, we plan to further enforce our commitment to responsible money handling by registering with SafeAgent, a scheme that really is built for letting agents that hold client deposits, in the hope that this will bring even further surety for our existing, as well as prospective, clients.
Re Hyphen, please could you confirm that none of the Directors of the Management Company have any professional or personal connection with Hyphen or the founder?
(response given by Board of Directors) I confirm that none of the Directors have any professional or personal connection to Hyphen, the founder nor any of their employees. There have been no incentives offered either.
Why you chose Hyphen instead of another agent?
(response given by Board of Directors) By choosing Hyphen, a much smaller company, who currently has 8 properties in their portfolio and have indicated that they are not going to exceed 20, we felt that we would be given a much more personal and transparent service from them.
During the 8 years (approximately) that we have been with W.E. I think we have had in excess of 6 property managers, so no continuity. As an example of this, we requested Service Level Agreements for all of the contractors who come to site i.e. what were the duties of the cleaners and gardeners; how many times should the lift company attend on site etc. There were none available and these have since been written!!!
We felt that by having a local company, Hyphen are located in Hertford town, we would be in a position to ensure that all contracts were relative to Newland Gardens and also that, where possible, local contractors could be used. (Some of the contractors used by W.E. come from Surrey and we are sure that their costs reflect this.)
So, to sum up, we felt that having a smaller, local company, we would have more control and make sure that the works carried out were at a fair price with no additional, hidden costs. To go with an alternative, more established company, we could have possibly ended up in a similar situation to the one we are in now.
With regards to the reserve fund which has been built up through the years, what happens to this? Who ends up dividing this?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) The existing reserve funds will stay in place with the money simply being transferred from Warwick’s client accounts to ours. No deductions are made from these reserves as part of this process.
What happens to the on-going contracts that Warwick have negotiated on our behalf?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) As per conversations with the Board of Directors, Hyphen will review each contract and consult with the Board of Directors on any which they/we feel are overpriced, or simply not value for money. It may be the case that each contract is routinely put to tender, allowing the existing contractors to re-tender too, giving them the opportunity to enter a revised price.
As a matter of course, Hyphen will arrange meetings on site with each of the maintenance contractors to introduce ourselves.
Clarity that Terry the Caretaker remains in employment with Newland Gardens Management if we transition to Hyphen?
(response given by Board of Directors) I’ve responded to one or two owners informing them that Terry is employed by Newland Gardens Management Company and therefore, where we go, he goes too.
What percentage fee is going to be on the turnover of funds? Where and how will the sinking fund (I’m assuming reserve fund is meant) is invested and if it is to be partially used for the lifts, as we all had to pay extra for the change of lifts after a said period?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) Currently, Hyphen does not hold any details on the reserve funds and therefore are unable to comment. If we understand the question correctly, there will be no fee from Hyphen specifically relating to transferring funds from Warwick to us.
How will Hyphen save us from the extortionate service charge?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) Hyphen have extensive experience in budgeting for buildings and estates and, although we are not miracle-makers, you can rest assured that we are fighting your corner to ensure that the service charge levels are only what is absolutely necessary for the best management of the estate.
Using trusted, local contractors and regularly reviewing fixed expenditure items (such as lift maintenance contracts, cleaning contracts and grounds maintenance contracts) we can ensure that our client is receiving the very best value for money. Our professional relationships with contractors position us well for negotiations, so we are often able to secure very good deals for our clients’.
We use a utility broker to take care of our clients’ utilities, meaning that these variable costs can be monitored, assessed and reviewed both throughout and at the end of each financial year. Our utility brokers put each meter (whether that be electricity or water) to the competitive market each year. We also work with an electrical company that specialise in communal utilities. This contractor makes qualified, reasonable recommendations to us regularly on how our clients’ can take advantage of the latest technologies to improve their energy consumption, which consequently reduces expenditure.
Is a chartered accountant is to be used to show balance sheet with the fund?
(Response given by Zach Crossley-Hay, Managing Director @ Hyphen Property Management Ltd) Of course. Section 21 of the Landlord and Tenant Act 1985 dictates that service charge accounts must be produced at year-end. Further, in accordance with Clause 9 of Part I of the Sixth Schedule of the Lease, we are obliged to instruct a chartered accountant to audit the accounts.