Building relationships

The service charge budget is likely the document that leaseholders will spend the most time looking at that you send them. It is very unlikely that the average leaseholder has a grasp of their lease terms, is totally up to date on Health and Safety best practices or understands the processes around service charge accounting. However, they will very much understand how much you are proposing they pay, what that money will be spent on and how this relates to previous years and possibly neighbouring developments.

The service charge budget is therefore the single most important time of year for you to communicate with your customers. This is your chance to give leaseholders your review of the previous year, explain your plans for the coming year, put in place long term plans and strategies as well as enlighten them on important changes in the industry or various market places that have affected your budget and plans.

Of course there will always be customers who disagree with your plans – you can’t please everyone – but the vast majority will appreciate the explanation and gain a deeper understanding of the way in which you plan to work. This can only ever be a good thing. This may seem like a lot of work, but it is time well spent. The alternative – just sending out the budget with no explanation – will lead to more work in the short term, via questions from leaseholders. As well as a harder time in the long term as you won’t have built a solid foundation for your relationship. In other words, your customers won’t trust you.

The budget therefore serves as a crucial tool for the property manager. Get it right and there is a high chance of a well maintained building and a harmonious relationship with tenants. Get it wrong and you will have dug a hole that can be incredibly difficult to get out of.