Case Study – St Giles Block Management in Wrexham
Project Objective: Reduce costs, improve selling and letting
Location: St Giles House, Wrexham
We were approached to quote for the Block Management contract work by one of the 15 leaseholders of the CADW Listed, St Giles House in Wrexham. They had experienced poor service from their managing agent, who were also indirectly their freeholder. The development ran at a loss, had very poor housekeeping and residents had trouble selling and letting apartments. Our primary role was to offer a cost effective and proactive block management solution. We attended site and reviewed the developments needs against the current budget. Paramount were able to demonstrate its understanding of the issues and solutions required. Paramount suggested the leaseholders exercise their “Right To Manage”.
Paramount were appointed and set about the application for Right To Manage, which was successful. Within weeks the day to day management was fully reviewed and new suppliers and contractors engaged. A financial review confirmed previously poor block management resulted in the developments failings, with no increase in funds necessary to maintain the lease and maintenance obligations.
Paramount set about enforcing the lease and introduced various housekeeping solutions to reduce operating costs whilst improving service. Regular maintenance and cleaning were possible with no increase in budget.
Paramount were tasked with demonstrating that they could achieve a reasonable and effective budget as promoted by them in their tender, without increasing the annual service charge budget. At that time the development had a £0.00 Reserve Fund. We promised to assist the new directors in resolving issues and proactively manage the development on their behalf.
Paramount carried out a full audit of the last 12 months costs. All lease and budget needs were reviewed along with the resident’s requirements.
Paramount were able to demonstrate to directors that considerable savings were achievable providing immediate savings of 45% against the existing and previous budgets.
The main areas or reduction were:
• Building Insurance saving – Year 1 35%, Year 2 further 55% (70% in total)
• Electricity reduced by 64%
• Reserve fund allocation 30% of budget (without increasing demands)
• Proactive property maintenance and contractor management 20%
Results, Expectations and Savings:
Paramount audited the development and provided alternate and cost-effective solutions to reduce costs and improve efficiency and cash flow. Building Insurance was proactively managed to reduce unnecessary claims and day to day maintenance was introduced to ensure repairs were dealt with swiftly and good standards could be maintained whilst operating within budget. All contracts were reviewed and new contractors and suppliers chosen.
This has allowed for a healthy reserve fund allocation of 30% of the annual service charge budget and there has been no increase in charges.
The development is a desirable place to live with high rental yields and strong sales, with good block management in place. Ideally located in Acton, Wrexham it is now a highly sought after dwelling.