# Decrease of Management Agent's Fee - Deflation?



## WHAT'SFREE? (3 Jun 2009)

Our Managing Agent has increased their management fees annually over the last few years “due to inflation”.

Can we ask them this year to decrease their fees due to deflation?  

If so, has anyone any recommendations of the level of decrease we could reasonably request?


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## ontour (3 Jun 2009)

Certainly if the reason they gave you in the past was inflation, you can use the inverse now.  Having said that it is more important that you focus on getting value for the fee that you pay the management agent.  Why not list out the services that they provide you and request a number of agents, including your current agent, to quote for the contract.

(I am assuming from your post that you are talking about the fee the management agent charge to the management company for providing the agent service rather than the annual fee that each unit pays.)


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## WHAT'SFREE? (3 Jun 2009)

Absolutely ontour;  I do mean the agent's management fee and not the annual service charge. 

Although I don't want to do a "head in the sand" thing and carry on blindly with the current agent, I have spent so much of my own time sourcing quotes from all the rest of various contractors and pushing the agent to source those for which I'm lacking information (to ensure best value for money in annual service charges), that ideally I would like to carry on using our current agent.

I'm just slightly fearful (due to my lack of expertise in the area) of changing agents.  Do you think I'm being unnecessarily wary?  Is it not such a big deal to change agent?


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## markpb (3 Jun 2009)

We (the directors in my my estate) got a letter from Wyse saying that a refund based on any negative CPI would be calculated at the end of the year and applied to our next bill - it's a nice touch but we'll probably still try to negotiate downwards if we don't move. 

I'd be interested in hearing from any owner/director who changed agents in the past - it seems like a huge undertaking and I'd like to know the risks.


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## purpeller (3 Jun 2009)

I suppose it depends on whether you're happy in general with your current agent. 
I'm a director of my management company and we changed last year due to massive dissatisfaction.  We did a lot of homework before choosing a new one and interviewed a few candidates.  We've seen huge improvement with the new people.


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## shesells (4 Jun 2009)

My concern would be the loss of files relating to ongoing procedings and precedents set in the development. Also I'm a a belated convert to the "better the devil you know"  clan. If you can work with the existing agents to get what you want, it's worth trying at least in my experience.

Put them on a month to month retainer to keep them on their toes, worked for us.


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## jaykayphd (1 Aug 2009)

markpb said:


> We (the directors in my my estate) got a letter from Wyse saying that a refund based on any negative CPI would be calculated at the end of the year and applied to our next bill - it's a nice touch but we'll probably still try to negotiate downwards if we don't move.
> 
> I'd be interested in hearing from any owner/director who changed agents in the past - it seems like a huge undertaking and I'd like to know the risks.


 
Did Wyse offer the refund out of the good of their health or had you asked for a reduction in their agent fees?


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## markpb (1 Aug 2009)

It was only 2 months since our last contract negotiations (they wanted a 5% increase, we gave them 2.5%) so we hadn't mentioned anything to them - the letter just arrived out of the blue.


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## L Hobdell (7 Aug 2009)

I am a managing agent myself with my own company of over 5 years, I am a firm believer that Managing agent fees should of course drop or freeze their prices in line with current inflation, I have spent a huge amount of time over the last 6 months in ensuring that i have secured the best quotes for services and maintenance for my clients thus saving them money by way of their annual service charges, and trust me there is an awful lot of money to be saved without sacrificing service. I also think that if you are not entirely happy with your current agent then you should of course shop around for a better deal and service and not just stay with them because it may be easier. I have taken over quite a few developments over the last few years that were experiencing problems with their agents and have by working closely with the board of directors or residents committee successfully solved all outstanding issues. in my experience there are very few problems that cannot be solved or improved with due care and attention.

I would expect my own clients to look for another agent if i was not providing them with a high commited level of service at a reasonable price.


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