Specimen Terms of Business

Specimen Terms of Business follow. The actual Terms of Business that govern a contract with a client will be specific and will reflect the agreed types and levels of service required.


Dated: Day/Month/Year


(1) An Apartment Management Company Limited




(2) HMS Property Management Services Limited





Apartment Management Agreement

Relating to the management of (Property).




Dated Day/Month/Year


1          An Apartment Management Company  Limited a company incorporated in England with registered number xxxxxxx and whose registered office is at Address (may be 27, Kingswood, Marchwood, Southampton, SO40 4YQ (the "Client")

2          HMS Property Management Services Limited a company incorporated in England with registered number 5638045 and whose registered office is at 27 Kingswood, Marchwood, Southampton, SO40 4YQ (the "Agent").


The Client has requested and the Agent has agreed to provide management services in respect of the Property.

Operative Provisions

1          Definitions and Interpretation

1.1       In this Agreement unless the context otherwise requires:

"Agent's Standard Charges" means £x per Unit;


"Directors" the directors of the Client from time to time;


"Document"   includes, in addition to a document in writing, a map, plan, design, drawing, picture or other image, or any other record of any information in any form;


"Excluded Services" the services set out in Schedule 2;


"Input Material" means any Documents or other materials, and any data or other information provided by the Client relating to the Services;


"Leases" means the leases of each Unit granted by the Client;


"Output Material" means any Documents or other materials, and any data or other information provided by the Agent relating to the Services;


"Property" means the freehold property at (property address).


"Services" means the services to be provided by the Agent for the Client as set out in Schedule 1 but excluding the Excluded Services;


"Unit" a single residential dwelling forming part of the Property;


"Working Day" means a day other than a Saturday and Sunday where banks are open for business in the City of London.


1.2       The headings in this Agreement are for convenience only and shall not affect their interpretation.


2          Supply of the Services


2.1       The Agent shall provide the Services to the Client subject to the provisions of this Agreement. Any changes or additions to the Services or this Agreement must be agreed in writing by the Agent and the Client.


2.2       The Client shall at its own expense supply the Agent with all necessary Documents or other materials, and all necessary data or other information relating to the Services, within sufficient time to enable the Agent to provide the Services in accordance with this Agreement. The Client shall ensure the accuracy of all Input Material.


2.3       The Client shall at its own expense retain duplicate copies of all Input Material and insure against its accidental loss or damage. The Agent shall have no liability for any such loss or damage, however caused. All Output Material shall be at the sole risk of the Client from the time of delivery to or to the order of the Client.


2.4       The Services shall be provided in accordance with this Agreement and otherwise in accordance with the Agent's current brochure or other published literature relating to the Services from time to time, subject to the provisions of this Agreement.


2.5       Further details about the Services, and advice or recommendations about its provision or utilisation, which are not given in the Agent's brochure or other promotional literature, may be made available on written request.


2.6       The Agent may correct any typographical or other errors or omissions in any brochure, promotional literature, quotation or other document relating to the provision of the Services without any liability to the Client.


2.7       The Agent may at any time without notifying the Client make any changes to the Services which are necessary to comply with any applicable safety or other statutory requirements, or which do not materially affect the nature or quality of the Services.


2.8       All monies collected and received by the Agent will until expended on liabilities of the Client, be held in a bank account opened specifically, and for the sole use of the Client. This account will be managed by the Agent, however, all payments made for services rendered to the Client must be countersigned by a Director of the Client before such payment will be honoured.


2.9       The Agent will maintain all information, including accounts, property register records and to make such information available for the Client and to permit the Client and its other professional advisors and representative at all reasonable times to inspect, to make copies of all documentation relating to the Services, subject to a levy of a reasonable copy charge.


3          Charges


3.1       Subject to any special terms agreed, the Client shall pay the Agent's Standard Charges and any additional sums which are agreed between the Agent and the Client for the provision of the Services or which, in the Agent's sole discretion, are required as a result of the Client's instructions or lack of instructions, the inaccuracy of any Input Material or any other cause attributable to the Client.


3.2       The Agent may vary the Agent's Standard Charges from time to time by giving not less than three months written notice to the Client.


3.3       All charges quoted to the Client for the provision of the Services are exclusive of any VAT which is chargeable at the prevailing rate.


3.4       The Agent will invoice the Client quarterly in advance, or at other times agreed with the Client.


3.5       The Agent's Standard Charges and any additional sums payable shall be paid by the Client (without set off or other deduction) within 30 days of the date of the Agent's invoice.


3.6       If payment is not made on the due date, the Agent shall be entitled, without limiting any other rights it may have, to charge interest on the outstanding amount (both before and after any judgement) at the rate of 2% per cent above the base rate from time to time of Lloyds TSB Bank plc from the due date until the outstanding amount is paid in full.


3.7       Should the Client require the Agent to carry out any services which do not form part of the Services, the Agent shall charge for such services on the basis of its standard hourly rates from time to time or as otherwise agreed between the parties prior to carrying out the additional services.


4          Rights in Input Material and Output Material


4.1       The property and any copyright or other intellectual property rights in:-


            4.1.1    any Input Material shall belong to the Client;


4.1.2    any Output Material shall, unless otherwise agreed in writing between the Client and the Agent, belong to the Agent, but the Client shall be entitled to use the Output Material for the purposes of utilising the Services by way of a non-exclusive licence, subject to payment in full of all sums payable under this Agreement.


4.2       Any Input Material or other information provided by the Client which is so designated by the Client and any Output Material shall be kept confidential by the Agent, and all Output Material or other information provided by the Agent which is so designated by the Agent shall be kept confidential by the Client; but the foregoing shall not apply to any Documents or other materials, data or other information which are public knowledge at the time when they are so provided by either party, and shall cease to apply if at any future time they become public knowledge through not fault of the other party.


4.3       The Client warrants that any Input Material and its use by the Agent for the purpose of providing the Services will not infringe the copyright or other rights of any third party, and the Client shall indemnify the Agent against any loss, damages, costs, expenses or other claims arising from such infringement.


4.4       Subject to clause 4.3, the Agent warrants that any Output Material and its use by the Client for the purposes of utilising the Services will not infringe the copyright or other rights of any third party, and the Agent shall indemnify the Client against any loss, damages, costs, expenses or other claims arising from any such infringement.


5          Indemnities and Undertakings by the Client


5.1       The Client will indemnify and keep indemnified the Agent from and against all losses or liabilities (including, in particular, damages, legal and other professional fees and costs, penalties and expenses) which may be suffered or incurred by the Agent and which arise directly or indirectly in connection with:


5.1.1    any act of neglect or default of the Client, its agents, employees or licencees or any claim by any third party in respect of any matter arising from the management of the Property provided that such liability has not been incurred through any neglect or default by the Agent in carrying out the terms of this Agreement;


5.1.2    any public liability claim matter (relating to the Property) and to undertake to maintain an appropriate policy at all times;


5.1.3    any breach by the Client of the provisions of this Agreement;


5.1.4    any contract of employment (written or otherwise) which is either existing prior to the date hereof and transferred to or adopted by the Agent or entered into by the Agent in pursuant of this Agreement (provided always that the same does not result from an unauthorised act or omission of the Agent).


5.2       Any payment made in respect of a claim under clause 5.1 must include an amount in respect of all costs and expenses incurred by the Agent in relation to the bringing of the claim (including a reasonable amount in respect of management time).


5.3       The Client undertakes to ratify all reasonable acts and proper acts, deeds and other things done by the Agent in connection with the management of the Property.


5.4       The Client undertakes to respond to the Agent with instructions, information or to other communications within a  period of 10 Working Days from a request from the Agent.


5.5       The Client undertakes within 10 Working Days of demand, to reimburse the Agent where necessary, in respect of all properly incurred items of expenditure relating to the management of the Property to ensure that the Agent is maintained in funds.


6          Warranties and Liability


6.1       The Agent warrants to the Client that the Services will be provided using reasonable care and skill. Where the Agent supplies, in connection with the provision of the Services, any goods (including Output Material) supplied by a third party, the Agent does not give any warranty, guarantee or other term as to their quality, fitness for purpose or otherwise, but shall, where possible, assign to the Client the benefit of any warranty, guarantee or indemnity given by the person supplying the goods to the Agent.


6.2       The Agent shall have no liability to the Client for any loss, damage, costs, expenses, or other claims for compensation arising from any Input Material or instructions supplied by the Client which are incomplete, incorrect, inaccurate, illegible, out of sequence or in the wrong form, or arising from their late arrival or non-arrival, or any other fault of the Client.


6.3       Except in respect of death or personal injury caused by the Agent's negligence, or as expressly provided in this Agreement, the Agent shall not be liable to the Client by reason of any representation (unless fraudulent), or any implied warranty, condition or other term, or any duty at common law, or under the express terms of this Agreement, for any loss of profit or any indirect, special or consequential loss, damage, costs, expenses or other claims (whether caused by the negligence of the Agent, its servants or agents or otherwise) which arise out of or in connection with the provision of the Services (including any delay in providing or failure to provide the Services) or their use by the Client, and the entire liability of the Agent under or in connection with this Agreement shall not exceed the amount of the Agent's charges for the provision of the Services, except as expressly provided in this Agreement.


6.4       The Agent shall not be liable to the Client or be deemed to be in breach of this Agreement by reason of any delay in performing, or any failure to perform, any of the Agent's obligations in relation to the Services, if the delay or failure was due to any cause beyond the Agent's reasonable control.


7          Termination


7.1       Either party may terminate this Agreement by giving not less than three months written notice to the other.


7.2       If the Client fails to give the Agent the notice referred to in clause 7.1, the Agent shall be entitled to charge a fee equal to those fees that would have been chargeable to the Client pursuant to this Agreement had the requisite notice been given.


7.3       Either party may (without limiting any other remedy) at any time terminate this Agreement by giving written notice to the other if the other commits any material breach or persistent breach of this Agreement and (if capable of remedy) fails to remedy the breach within 30 days after being required by written notice to do so, or if the other goes into liquidation, becomes bankrupt, makes a voluntary arrangement with its creditors, or has a receiver or administrator appointed.


7.4       Upon termination of this Agreement both parties will be liable to pay to the other forthwith any monies then due and owing to the other party.


8          General


8.1       This Agreement constitutes the entire agreement between the parties, supersedes any previous agreement or understanding and may not be varied except in writing between the parties. All other terms, express or implied by statute or otherwise, are excluded to the fullest extent permitted by law.


8.2       A notice required or permitted to be given by either party to the other under this Agreement shall be in writing addressed to the other party at its registered office or principal place of business or such other address as ay at the relevant time have been notified pursuant to the provision to the party giving the notice.


8.3       No failure or delay by either party in exercising any of its rights under this Agreement shall be deemed to be a waiver of that right, and no waiver by either party of any breach of this Agreement by the other shall be considered as a waiver of any subsequent breach of the same or any other provision.


8.4       If any provision of this Agreement is held by any court or other competent authority to be invalid or unenforceable in whole or in party, the validity of the other provisions of this Agreement and the remainder of the provision in question shall not be affected.


8.5       Any dispute arising under or in connection with this Agreement or the provision of the Services shall be referred to arbitration by a single arbitrator appointed by agreement or (in default) nominated on the application of either party by the President for the time being of The Royal Institution of Chartered Surveyors.


8.6       The headings in this Agreement are for convenience only and shall not affect their interpretation.


8.7       No term of this Agreement is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.


8.8       This Agreement may be assigned or transferred in whole or in part with the prior written consent of the other party (such consent not to be unreasonably withheld or delayed).


8.9       Nothing in this Agreement shall create or be deemed to create a partnership between the parties.


8.10     English law shall apply to this Agreement, and the parties agree to submit to the non-exclusive jurisdiction of the English Courts.


IN WITNESS whereof this Agreement has been entered into the day and year first above written


Schedule 1

The Services


1          Issuing demands for service charges and, where appropriate, ground rents and all other payments due from lessees and dealing with arrears including liaison with the  mortgagees or the Client's solicitors, as appropriate.


2          Preparing a budget of annual service charge expenditure to enable recommendations to be made as to levels of service charges to be paid. Advising on the provision of a reserve fund and sinking fund.


3          Providing the Directors with regular statements of income and expenditure showing the present position of the Client's finances. Preparation of annual accounts in accordance with the terms of the Leases and liaison with accountants over the provision of audited/certified accounts as appropriate.


4          Administering contracts for the provision of services provided to common parts and dealing with the authorisation of payment of accounts rendered by contractors.


5          Visiting the Property and carrying out inspections as and when required, including work in progress and to assess the general condition of the Property, such inspections not to be construed as comprehensive, structural surveys.


6          Co-ordination of buildings insurance by introducing the client to an independant intermediary in respect of the Property as well as organising for periodic revaluation for insurance purposes (the cost of which is to be met by the Client) in accordance with the Client's instructions.


7          Responding to routine enquiries raised by individual lessees and to ensure that all necessary information is circulated to lessees, as required.


8          Advising the Client generally in the matter of notices, consents and approvals pursuant to the terms of the Leases.  Associated fees will normally be recoverable from applicants for Agents' services in this regard.


9          Attending regular meetings with the Directors to discuss and advise ongoing matters, changes in legislation, planned maintenance and other matters affecting the Property.


10        In addition to the meetings referred to in item 9, provision of necessary arrangements in connection with the Client's annual general meeting, to include attendance at the meeting.


11        Instructing and supervising competent contractors to provide both building and maintenance services to the Property, in accordance with such expenditure limits which have been previously agreed.


12        Liaison with solicitors regarding conveyancing enquiries relating to the sale and purchase of individual Units for which an additional fee will be charged to the parties concerned.


13               Advising on lease covenants requiring repair, decoration and other areas of possible dispute and where necessary to seek further instructions.





Schedule 2


Excluded Services


1          Carrying out an inspection of the Property (other than the common part thereof), or a building survey or valuation of the Property as security or for insurance purposes or preparing any schedule of dilapidation or inventory.


2          Offering vacant property to let, advising the Client on the terms of any lease or negotiation of the terms of any new or varied lease.


3          Attending at court or the Leasehold Valuation Tribunal or Arbitral Tribunal or other hearing and preparing evidence in relation to any matters arising from the management of the Property by the Agent or in respect of which the Agent is required to give evidence.


4          Dealing with local government matters including council tax valuations, planning permission and building regulation consent.


5          Directly, in the name of the Agent, engage, instruct, supervise and pay the fees, other charges and disbursements from the Agents own funds of any contractor or other professional consultant engaged on behalf of the Client. 


6          Advising on health and safety matters other than in respect of matters that are apparent on inspection of the Property, for example loose wiring. To the extent that any external health and safety advisors are required, these shall be appointed at the cost of the Client and with the Client's prior consent.


7          Any advertising and recruitment of staff on behalf of the Client.


8          Supplying extra copies of statements of account and copies of any other documents.


9          If the Client is a company, acting as company secretary (subject to the Client providing cover under an appropriate directors and officers liability policy). If this is required a charge, currently, of £120 per annum will be made. This will be invoiced in advance. 


10        Dealing or advising upon applications for assignments of tenancies or leases, sub-lettings, alterations and changes of use.


11        Operating a payroll service for staff employed by the Client.


12        Liaising with authorities, contractors or other bodies in the event of fire, flood or natural disaster.


13        Organising extraordinary works to the Property that are (i) not a requirement pursuant to the terms of the Leases, for example, dealing with damage to the Property caused by third parties, or (ii) are not related to the handover of the property to the Client from the developers of the Property.


14        Providing information to solicitors and others in connection with enquiries on sales and on providing information and/or files to the Client as directed following the termination of this Agreement.


15        Providing any other services to the Client or in connection with the Property which are not specified in this Agreement.


16        Considering applications from lessees to carry out alterations, consents or approvals, pursuant to the terms of the lease.


17         Engaging for and on behalf of the Client, staff, whether part time or full time, residential or not, and pay their remuneration in accordance with agreed terms (withholding of PAYE, tax and National Insurance contributions) and, where appropriate, dismissal payment or redundancy pay from Client funds. The Client will provide the Agent with an indemnity in accordance with clause 5.1. 


18        Advising upon the availability of grant applications in respect of the Property and, if applicable, the making of such applications on behalf of the Client. All disbursements incurred by the Agent in carrying out any of this work will be re-imbursed by the Client.









Signed by                                            ) ______________________________

for and on behalf of

HMS Property Management Services Limited



Signed by                                            ) ______________________________

for and on behalf of

The Apartment Management Company Limited



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