Building's management company - can I employ myself as a contractor?

tante

We own one leasehold unit in a block of converted flats. Last year I signed up as one of the directors of the building's management company (along with a couple of other leaseholders) so that we could work together to speed up improving the condition of the building.


The contractors currently responsible for the cleaning are really bad/expensive, so since I am here in the building and a pretty experienced cleaner I would like to do the bi-weekly clean myself - but as a director, am I allowed to act as a contractor or would that be considered some kind of conflict of interest?



I should stress that I am planning on charging less than the current contractors, and the other directors are in agreement that I would probably do a better job!

eddddy

Under standard freeholder/leaseholder (landlord and tenant) legislation...

Yes - you could do the cleaning and get paid by the management company.

... unless the management co has any special rules that say otherwise.

Under the standard legislation, your cleaning charge would have to be 'reasonable' - otherwise a leaseholder could challenge it.

But if you're charging less than other cleaners (and you're doing an equally good job), it would be hard for anybody to say the charge was not 'reasonable'.

need_an_answer

would you need to abide by the old chestnut of health and safety or indeed provide evidence of public liability insurance?



I'm asking the question not just to the OP but to all as I think its a great idea but wonder how it fits with the rules and regulations that so often now need to be in place.

tante

Thank you, I'm not aware of any rules of that kind but I'll look into it!

tante

need_an_answer wrote: »

would you need to abide by the old chestnut of health and safety or indeed provide evidence of public liability insurance?

I'm asking the question not just to the OP but to all as I think its a great idea but wonder how it fits with the rules and regulations that so often now need to be in place.

That's a very good point, we do use a local management firm to administrate the management company (emergency call-outs, sorting out quotes and works, that kind of thing) and they do seem to have a bee in their bonnet about health and safety so hopefully they won't object....

InterestedParty2018

Great idea, but would suggest you consider the following:

- How will you be charging for your work/time? Sole Trader, or a cleaning company?
- will you be insured? If you trip or injure yourself, would you seek compensation?
- what if another resident (or their visitor) trips over you vacuum cord. Will you have PI insurance in place?
- will the appliances you use be PAT tested?
-Will cleaning materials (in particular detergents or similar products) be kept away from the residents either whilst in use or in storage?

In (my) ideal world it would be a simple matter of someone giving up their time for a few £'s to keep the common parts clean. Lower cost to all and better quality job.

Frustratingly there are so many legal implications/risks/regulations which have to be taken into consideration. Ultimately it is the end user (the lessee) who is burdened with this cost.

All you need is one single individual to suffer an injury (them, their child, their visitor slipping on a wet tile, falling down stairs because handrail too slippy, tripping over vacuum cable), or someone to get a "bee in their bonnet" about the appointment of a director .. then it could become messy.

Often people (commercially and residential) question "how can a cleaner possibly justify £15 -£20 per hour", and think this is what the individual earns. Sadly, once you take into consideration tax, insurance, administrations costs and compliance requirements, the individual cleaner will see a lot less.

Sorry to be "Mr Negative", but hope it gives you an explanation of the often higher than expected costs for simple work, along with the risks you need to consider if you take on the cleaning duties.

NeilCr

Yes. As others have said you could do it.

The only thing I'd add is that (from bitter experience) residents are funny animals. If someone there thinks something is wrong with your cleaning (not saying there is but folks have different standards) they "know where you live" and you might end up in a bit of a dispute

Taking into account InterestedParty's comments above as well, personally, I wouldn't do it. Could be a heffalump trap along the way

need_an_answer

InterestedParty2018 wrote: »

Great idea, but would suggest you consider the following:

- How will you be charging for your work/time? Sole Trader, or a cleaning company?
- will you be insured? If you trip or injure yourself, would you seek compensation?
- what if another resident (or their visitor) trips over you vacuum cord. Will you have PI insurance in place?
- will the appliances you use be PAT tested?
-Will cleaning materials (in particular detergents or similar products) be kept away from the residents either whilst in use or in storage?

In (my) ideal world it would be a simple matter of someone giving up their time for a few £'s to keep the common parts clean. Lower cost to all and better quality job.

Frustratingly there are so many legal implications/risks/regulations which have to be taken into consideration. Ultimately it is the end user (the lessee) who is burdened with this cost.

All you need is one single individual to suffer an injury (them, their child, their visitor slipping on a wet tile, falling down stairs because handrail too slippy, tripping over vacuum cable), or someone to get a "bee in their bonnet" about the appointment of a director .. then it could become messy.

Often people (commercially and residential) question "how can a cleaner possibly justify £15 -£20 per hour", and think this is what the individual earns. Sadly, once you take into consideration tax, insurance, administrations costs and compliance requirements, the individual cleaner will see a lot less.

Sorry to be "Mr Negative", but hope it gives you an explanation of the often higher than expected costs for simple work, along with the risks you need to consider if you take on the cleaning duties.

Thank you for this post it was the exact thing I was hoping might come up when I posted my earlier comment.

I'm not negative to the idea I still think its a great one but there are so many variables regarding liability insurance that surely come into play when you try and opt into a self managing cleaning contract.

Im the director of what sounds like a similar set up and we often get residents who say they know a friend who could do a job within our complex,one that springs to mind as an example was roofer who could potentially fix a flat roofed area for us, however we were batted back a little by our managing agent at that point simply because the contractor was not able to provide certification for the correct level of public liability.


That's the sort of area that I believe the OP may also struggle with,but I really do remain interested in whether this comes to fruition...OP please keep the thread updated.

InterestedParty2018

I have dealt with a managing agent who would not formally instruct any contractor to undertake work without full details of their relevant accreditation and insurance. (Equally, they would not authorise use of service charge funds to pay any contractor they had not instructed!) Of course, licences for asbestos removal, qualifications for electrical and gas work is perfectly reasonable, however for a simple repair, cleaner, gardener it made things very tedious.

Their explanation was that by instructing or authorising work they take on an element of risk and the pre-check is part of their due diligence. If an issue does occur, they can present evidence of taking reasonable precautions.

eddddy

The other side of this coin is that leaseholders complain about high service charges, because freeholders/management companies seem to pay ridiculously high rates to contractors.

Perhaps a big part of the reason is that they only employ contractors who can prove qualifications and insurance, respond to detailed tenders, provide schedules of work, provide detailed invoices etc.

Contractors who are geared up to do that kind of stuff, tend to charge a lot more.

I had a great (good value) painter/decorator who redecorated a flat. The management company invited her to quote for redecorating the communal areas, but she declined, because of the paperwork and admin overhead.

You also hear of qualified insured electricians having to be called out to change a light bulb for £50, when a leaseholder would have happily got a step ladder out and done it for free.

NeilCr

eddddy wrote: »

The other side of this coin is that leaseholders complain about high service charges, because freeholders/management companies seem to pay ridiculously high rates to contractors.

Perhaps a big part of the reason is that they only employ contractors who can prove qualifications and insurance, respond to detailed tenders, provide schedules of work, provide detailed invoices etc.

Contractors who are geared up to do that kind of stuff, tend to charge a lot more.

I had a great (good value) painter/decorator who redecorated a flat. The management company invited her to quote for redecorating the communal areas, but she declined, because of the paperwork and admin overhead.

You also hear of qualified insured electricians having to be called out to change a light bulb for £50, when a leaseholder would have happily got a step ladder out and done it for free.

Quite.

I do think that is where owning the freehold helps. On both of the estates I have lived on we owned the freehold and the majority of directors lived on site. That means we know the residents and, actually, engage with the contractors when they are there. We are big on local contractors - our current (very large) MA sometimes only has specialist contractors on their books (they have to be vetted) a long way away which adds to the costs

One of the (many) reasons we are just about to change MA to one which is more locally based - and smaller.

I know the gardener well and, as you say, he says the paperwork is a nightmare. But, he has a good contract with us and will change bulbs etc, if asked, without charge. Because he likes us and he knows we look out for him.