What Should Block Management Cost? Fixed-Fee vs Hourly
Ask three managing agents what they charge and you’ll get three different structures — which is exactly why boards struggle to tell whether they’re getting value. Here is how block management is actually priced, and how to judge it.
The usual model: a fee per unit, plus everything else
Most block management is priced as a management fee per unit per year, taken from the service charge. On top of that sit the actual costs of maintenance, statutory compliance, insurance and any major works. The headline management fee is only part of the picture — the total a block spends is that fee plus everything arranged on the block’s behalf.
Fees vary widely with the size of the block, the services included, and location. A small self-managed block and a large managed estate are not comparable on a single number, so be wary of any quote given without seeing your building.
Where the real cost hides
The management fee is rarely where boards overpay. The cost usually hides in:
- Add-ons outside the core fee — company secretarial work, out-of-hours call handling, major works oversight, additional certificates. A low headline fee with a long list of extras can cost more than a higher all-in one.
- Contractor mark-ups — a margin added to every sub-contractor invoice that the board never sees. On reactive works especially, this is where money leaks.
- Activity billing — being charged by the hour and the call-out, which quietly rewards a supplier for more going wrong, not less.
The single most useful question a board can ask is: “Show me the real cost of the work, and show me your fee on top of it, separately.” If a supplier won’t separate the two, that’s the answer.
Fixed-fee vs open-book: match the model to the work
The honest way to price a block splits the work in two:
- Predictable, known-scope work — statutory compliance is the clearest example. The obligations are defined by law and known in advance, so it can be fixed-priced with confidence. That removes the surprise bills boards hate and makes budgeting simple.
- Genuinely unpredictable work — reactive repairs and ad-hoc works. These are best handled open-book: shown at real cost, approved before they proceed, with no hidden margin. Flat-pricing the unpredictable just means paying a padded rate to cover someone else’s uncertainty.
This is the model we build around: fixed-fee statutory compliance for the known work, open-book for the rest, and one dashboard where the board can see spend against budget in real time. It’s also why we can quote a confident fixed fee — because we work from your building’s actual assets and history, not guesswork.
A fair-value checklist for boards
- Is the management fee separated from the cost of works?
- Are compliance obligations priced clearly, ideally at a fixed fee?
- Are reactive works open-book, at real cost, with approval before spend?
- Are there hidden add-ons — and what’s the true all-in figure?
- Can you see spend against budget without asking for a report?
If you’d like an honest read on what your block should be paying, a compliance review will map your obligations and show you the fixed fee for the known work — with no obligation.
This guide is general information, not financial advice. Costs vary significantly by building, scope and region; always compare like-for-like and verify what is and isn’t included.