Preim Limited

Your managing agent appointed by Hunts Grove Management Company Limited.

This page is provided by HGPC for Preim Limited as an information resource for Hunts Grove residents. Unless otherwise stated, all links on this page connect to the Preim company website. HGPC is not responsible for the content on this page.

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Introduction to the Role of Managing Agent

HGPC appreciates the ongoing communication and collaboration with the team at Preim. Preim has an open invite to parish council meetings and usually attends in person every quarter or when updates arise. For the November 2021 parish council meeting, HGPC asked Preim for an updated overview of their organisation, role, and tasks. This is copied below for reference.

Management Company Structure Model

Below, "HGMCL" is Hunts Grove Management Company Limited. The model structure for HGMCL is as set out below:

The words that support this model structure are detailed within the following legal documents that each homeowner who purchases a property at Hunts Grove enters into:

Property transfer;
Deed of Covenant
HGMCL company Memorandum and Articles of Association;
And for leasehold properties a Property Lease;
Preim’s contract with the HGMCL

The Management Company Structure model is robust, transparent, and proven and has been used for thousands of properties on developments with communal amenities across England and Wales.

Managing Agents Fee

Preim is contracted by the HGMCL to operate as the Managing Agent for the HGMCL. This is a rolling contract with 6 months’ notice on either side. Under this contract, Preim is entitled to receive a per sold property Managing Agents Fee of £77.95 + VAT per year.

Subsequently, the actual Managing Agents Fee figures shown within the annual Service Charge accounts will accumulate year on year based on the amount of existing properties plus the amount of properties that have been completed within that financial year. This will continue until the development is fully completed, at which point theoretically the actual Managing Agents Fee charged will match what is shown within the estate Service Charge budget (currently £163,700).

The total fee that Preim has taken this year (2021) is £24,940.58 (Inc. VAT). The work that Preim has undertaken over the last 12 months comprises the following:

Providing a 24/7, 365 days a year telephone helpline for residents;
Handling queries from property owners and seeing those queries raised through to completion, providing updates where required;
Providing an online residents portal where you can access useful information relating to your estate, and your own service charge account;
Liaising with vendors and purchasers’ solicitors and responding to queries during property re-sales;
Arranging and attending residents’ meetings;
An allocated Customer Account Manager who takes ownership of Preim’s role on the development;
Arranging and attending Steering Committee/Management Company Director meetings when required and maintaining those relationships;
Supporting the Steering Committee/Management Company Directors in their work on the development;
Attendance at Parish Council meetings;
Provision of Welcome Packs for Homeowners;
Provision of insurances as required, including public liability, buildings, and directors liability insurance;
Preparation of an accurate annual service charge budget, which provides good value for money;
Issuing service charge invoices along with a copy of the agreed budget and an explanation of why the budget has been allocated in such a way;
Preparation and issuing of annual service charge accounts and statutory accounts for your management company. This gives you full transparency on what is spent and where;
Holding service charge monies in client/escrow accounts and administering them to comply with the RICS Code of Practice service charge, Residential Management Code, and the ARMA, ICAEW, ACCA & RICS joint guidance on accounting for service charges;
Collecting service charge arrears in order to ensure the management company is financially robust;
Preparation of monthly income and expenditure reports which are accessible to property owners;
Checks and authorization of payments to suppliers;
Provision of any other financial reports/information which may be reasonably required;
Arranging an independent annual audit of the management company and service charge accounts;
Certification of annual income and expenditure incurred;
Fulfilling the role of Company Secretary for the management company;
Holding a register of property owners and maintaining records;
Making the annual return for the management company;
Undertaking continued detailed defect identification (snagging) on areas that are to be handed over from the developer to the management company and working with the developer to ensure resolution on behalf of residents. You will appreciate that a significant amount of the Account Manager’s time has been spent in this regard.

Preim’s financial model for the Hunts Grove development is designed such that as the number of units on the development increases, our Managing Agent’s Fee reduces from £77.96 plus VAT to £60.00 plus VAT. However, the key point here is that the Managing Agents Fee is always agreed upon with the Directors of HGMCL annually as part of the budget approval process. Indeed, as the development grows to maturity the managing agent’s fee will always be driven by competition and what the ‘market’ is currently paying.

During the 2019/20 financial year, 153 properties were sold and were therefore contributing towards the estate Service Charge. During the 2020/21 financial year 291 properties were sold and were therefore contributing towards the estate Service Charge. Please note, the reason why the total actual Managing Agents Fee figures shown within the annual Service Charge accounts are less than the above sale rates and per property Managing Agents Fee rate is due to units that complete during a year paying a prorated amount of Service Charge based on the date on which they complete.

Historically, there is also a Managing Agents Fixed Fee that was included within the estate Service Charge budget. This was agreed in Preim’s contract with HGMCL as an amount paid to Preim during the early stages of the development whilst the amount of Managing Agents Fee income generated from property owners Service Charge payment was insufficient. Please note, the Managing Agents Fixed Fee was paid by Crest Nicholson. Given the stage the development is now at, the Managing Agents Fixed Fee is no longer applied.

Just by way of an example and to demonstrate our competitiveness, Preim currently manages 17,000 units on 200 estates with 30,000 units in our new business pipeline. We are also currently tendering in competition with other Managing Agents for a developer’s portfolio comprising 6,000 existing and proposed homes on 7 existing urban extensions. This is a situation where the existing Management Company Directors working with the resident Steering Committees have decided to replace the existing managing agent due to poor performance mid-development.

As a business we know that we are competitive.

Reserve Fund Contributions

Regarding the Reserve Fund Contribution due from Crest Nicholson, the Section 106 agreement (appendix 5) prescribes the following:

“The Developer will place a total sum of £1.9m into a Service Charge client/escrow account, which will be administered on behalf of the Management Company by the managing agent. This sum will be drawn down in tranches and monitored independently linked to the satisfactory completion of the Community Centre Building, Sports Pitches, Allotment Land and Open Spaces”

As per the above, the ‘developers’ £1.9m contribution is linked to the completion of the aforementioned communal assets, that will eventually belong to the HGMCL. I can confirm that so far as Preim is concerned, none of the £1.9m has yet been placed in a ‘Service Charge client/escrow account’ which is administered by Preim. I would envisage that at a point in time this money will be transferred to the existing ring-fenced Hunts Grove client account which Preim administers, and then spent as required by HGMCL or retained. Once this transfer has taken place, the funds will appear on the balance sheet in the Service Charge accounts. I have explained above regarding Preim’s Managing Agents Fee structure. As such, we would not charge anything in addition to administer the £1.9m.