Glossary of block management terms

Plain-English meanings of the words in your lease, your service charge demands and your building's safety paperwork.

By Saif Bonar, Managing Director · Last reviewed 22 October 2026

Annual general meeting (AGM): The yearly meeting of an RTM or resident management company's members, where directors are elected and the accounts are presented.
Apportionment: The share of the total service charge each flat pays, usually set out in the lease as a percentage or a fraction.
Balancing charge: An extra demand after the year-end accounts show the building spent more than the budget. If it spent less, leaseholders get a credit instead.
Building Safety Act 2022: The law that created duties for higher-risk buildings and protects most qualifying leaseholders from paying for historical safety defects.
Building Safety Fund: Government funding to remove unsafe cladding from residential buildings at least 18 metres high in England.
Client money protection (CMP): Insurance that protects service charge money held by a managing agent if the agent fails or misuses it. Agents must belong to an approved scheme.
Common parts: Areas shared by everyone in the building, such as hallways, stairs, lifts, roofs, bin stores and grounds.
Demised premises: The parts of the building that belong to an individual leaseholder under their lease, usually the inside of the flat.
EWS1 form: A form recording an assessment of a building's external walls, often asked for by mortgage lenders on buildings with cladding.
Fire risk assessment (FRA): A legally required review of fire hazards in the common parts and the measures in place to deal with them.
FRAEW: Fire risk appraisal of external walls: a specialist assessment of how the outside walls of a building would behave in a fire.
Freeholder: The owner of the building and the land it stands on. Leaseholders own long leases of their flats from the freeholder.
Ground rent: A yearly payment some leases require to the freeholder. Most new long residential leases granted since 30 June 2022 have a ground rent of zero.
Higher-risk building: A residential building at least 18 metres or seven storeys high with at least two homes. These have extra duties under the Building Safety Act.
Lease: The contract that sets out a leaseholder's rights and obligations, including what the service charge can cover and how it is shared.
Leaseholder: Someone who owns a flat on a long lease, usually for 99 years or more, rather than owning the building itself.
LPE1: The standard leasehold information form a managing agent completes when a flat is sold, covering service charges, works and disputes.
Major works: Large projects such as roof replacement or redecoration. If any leaseholder would pay more than £250, Section 20 consultation applies.
Managing agent: The company appointed by the freeholder, RTM company or resident management company to run the building day to day.
Principal accountable person: For a higher-risk building, the person or company with the main legal duty to manage building safety risks.
Reserve fund (sinking fund): Money collected over several years to pay for large future costs, so leaseholders do not face sudden big bills.
Resident management company (RMC): A company, usually owned by the leaseholders, that is responsible under the leases for managing the building.
Right to Manage (RTM): A legal right for qualifying leaseholders to take over the management of their building from the freeholder, through an RTM company.
Section 20 consultation: The formal consultation leaseholders must be given before major works or long-term contracts above set limits, under the Landlord and Tenant Act 1985.
Section 20B: The rule that service charge costs generally cannot be demanded more than 18 months after they were incurred unless leaseholders were told in writing.
Selective licensing: A council scheme requiring private landlords in set areas to licence rented homes. Croydon's current scheme started on 25 September 2026.
Service charge: The money leaseholders pay towards running, repairing and insuring the building, as set out in their leases.
Service charge budget: The estimate of the coming year's costs, used to set each leaseholder's on-account demands.
Service charge year: The 12-month period the lease uses for service charge accounts. It does not always match the calendar year.
Year-end accounts: The statement of what the building actually spent in a service charge year, compared with the budget.