Steve Knox argues the case for outsourcing.
Speak to any managing agent and they will tell you that the management of ‘energy for landlord supplies’ can present problems. Are we getting a good deal? Are we in contract? Why can’t anybody sort out problems on our account? These are just some of the questions that are frequently asked.
So why is energy management an issue and what makes energy supply more complex for residential blocks than for individual householders?
The problem is twofold. First, you are frequently dealing with a third party because many landlord’s supplies are managed by a property management company on behalf of an RMC ; and second, landlords’ supplies are invariably via commercial as opposed to residential meters. When this is the case you then introduce contracts with terms different to those for residential supplies.
Your average householder is on a 28-day rolling contract. They can change supplier by giving 28 days’ notice. Commercial terms are more complex: blocks are likely to be on one or two year, or even rolling contracts where it is difficult to ascertain when that contract can be broken should the customer wish to change or negotiate a better deal.
Steve Knox, Managing Director of Block Management Utilities (BMU) recognises similarities to the residential lettings market. When Hallmark entered that market some ten years ago there were no solutions to help letting agents manage their utilities. The same is now the case in the block management market. Primarily the ‘Big Six’ suppliers dominate the supply of energy but many clients feel they are getting a poor deal. Many clients are on deemed rates, unaware of any contract terms and unable to receive an acceptable level of service on their account..
As a result, managing agents frequently need support. They need help in establishing the best contract terms because the majority do not have the resources or industry knowledge to know whether they are getting the right deal or not.
One solution is to outsource energy management. This is what many companies in the lettings industry have done. Property managers should look for a company that can provide a service not just a price. There are many brokers that look at prices in the market but this is just a small part of what is required, as you need a company with the infrastructure to support the ongoing needs of the client.
It is not only the day-to-day services on offer that are important. Steve Knox points out that good communication is essential to a successful relationship. He advises looking for an energy management company that can provide a personal service and will designate a key contact to your account so that you are not passed from one person to another. There should be a system in place that ensures the client is able to give feedback and raise any issues they may have before they become problems and enable the management company to review progress.
“Energy is a complex business and billing inaccuracies and estimates are just two of a whole host of problems that exist. But it’s amazing what can be solved by good communication and expert support”.
Steve Knox, Managing Director of Block Management Utilities