14 Oct Understanding Management Packs
It’s one of the most stressful and expensive parts of any property sale or purchase – the paperwork.
Making sure that you have the correct documentation all in order is crucial to ensuring that the sale of a property goes smoothly, and avoids further problems down the line. A key part of many sales, a Management Pack is designed to do just this, and you may have heard the term from your conveyancers – but what exactly is a Management Pack, and do you even need one?
What is a Management Pack?
Sometimes going by alternative names [it’s often called a ‘Sales Pack’], Management Packs are a comprehensive set of documents relating to a selling property. Although the exact collection of documents will vary somewhat depending on the property, Management Packs are designed to give a full picture of the property’s condition, history, and any obligations expected from the property’s owner.
What’s in a Management Pack?
The exact composition of a Management Pack will vary from property to property – newbuild properties, for example, will often have less documents in their Management Packs as they are only recently built.
Generally speaking, a Management Pack will consist of some combination of:
- An LPE1/FPE1 Questionnaire form;
- A current service charge/ground rent statement;
- The most recent three years’ Income and Expenditure Accounts for any service charges
- A building/public liability insurance certificate and policy document for the building, or any shared areas;
- An estimate of service charges for the current/upcoming service charge period;
- An estimate of any service charge costs for the most recent service charge year [if no Income and Expenditure Accounts have been produced];
- Copies of any due or expected invoices for major works;
- Copies of any legal notices served on the property, regarding forfeiture proceedings or legal disputes;
- Any additional documents as relevant.
Again, whilst these are the documents most commonly found in Management or Sales Packs, some documents won’t be applicable to all properties, so it’s best to confirm with the managing agent if there is something specific that you need relating to the property.
What is an LPE1/FPE1 Questionnaire?
The Leasehold Property Enquiry Questionnaire [LPE1 – for leasehold properties] or Freehold Property Enquiry Questionnaire [FPE1 – for freehold properties] is the key document in any Management Pack, as almost all of the other documents supplied as part of the pack will relate to questions listed within the LPE1/FPE1 Questionnaire.
Consisting of multiple pages, the LPE1/FPE1 is essentially a list of questions relating to different issues regarding the property – the service charge costs, any legal issues that exist, any unpaid debts at the property that could be passed to the buyer, and serious repairs that are anticipated, and so on. It is designed to provide a comprehensive list of answers to pretty much any question that your solicitors or a prospective buyer will need to ask, clearing the way for a smooth sale.
Who supplies the Management Pack?
Like the make-up of the Management Pack itself, the party responsible for supplying the pack also varies depending on the property.
For leasehold properties, it can be the responsibility of the freeholder, management company or the managing agent to put the pack together and respond to your solicitor’s enquiries.
Do I need to buy a Management Pack?
A Management Pack is not a legal requirement for a property sale – you could theoretically sell your property without one.
Realistically however, as Management Packs provide a detailed collection of documents and advice regarding the property, the seller of a property will nearly always need to buy a Management Pack in order to sell their property.
Understandably, any prospective buyer wants to have a clear picture of the property’s condition, and any obligations that they would be taking on if they bought it – as the Management Pack is the simplest and most efficient way to do this, it is common practice for the seller to request one from the relevant persons, whether that be the freeholder, the management company or the managing agent.
Need more information on Management Packs? Call or email our friendly Sales Team today.