Regulation for Block Managers?
October 31st, 2017
With annual service charges estimated to total £3.5 billion (an average of £830 per leaseholder) and UK wage growth at its lowest point for 210 years, leaseholders are keen to ensure their monies are being expended reasonably; and rightfully so.
On the 18th October the Communities Secretary, Sajid Javid MP, announced a fresh consultation paper into the regulation of managing agents with a view to introducing “new measures to help create a fairer property management system that works for everyone”
The consultation will consider matters such as:
- whether regulatory overhaul of the sector is needed;
- measures to protect consumers from unfair costs and overpriced service charges; and
- ways to place more power in the hands of consumers by giving leaseholders more say over their agent.
The government may also consider changing the law so that it is compulsory for all letting and managing agents to be qualified and regulated.
Having started as a property manager myself I know all too well how demanding the job can be. Block Managers need to combine the legal knowledge of a solicitor with the construction knowledge of a building surveyor all the while effectively communicating matters to leaseholders with a level of skill that would rival official diplomats. Not an easy task and certainly not a job that suits everyone. The difficulty is compounded by the complexities of our property system and a general lack of understanding of how the leasehold system operates. One way to help tackle the issue would be to introduce the basics of property into the educational curriculum (along with finance basics such as mortgages and the concept of ‘credit’); couple this with a greater onus being placed upon conveyancers to fully and simply advise purchasers of what obligations come with leasehold ownership and this may set us on the right path. That being said, managing agents also need to take responsibility.
The sector has remained largely unchanged for some years with the only advances in case law and the introduction of a redress scheme to help protect both leaseholders and agents. Against this relative stable backdrop the wider consumer markets have seen a seismic shift in the level of customer empowerment and feedback and the property industry has been slow to embrace this. For the most part, I believe that managing agents take pride in their work and strive to deliver the best service possible. The majority are keen to utilise new technology to their advantage and recognise the need to be more ‘service’ focussed. Unfortunately, , there are a minority of agents who remain entrenched in the ‘old ways’ and simply fail to be guided by any legal standards; I am a great believer that greater regulation could put an end to such practices.
Any block manager worth their salt will be IRPM accredited and have an almost encyclopaedic knowledge of the RICS Service Charge Residential Management Code of conduct, however, with no entry-level requirements to practice in the sector it comes as no surprise that problems do occur. It is for this very reason that I wholly advocate further regulation of the industry and the individuals involved. Pier Management Limited (and many other companies we deal with) invest heavily in staff training and endeavour to ensure our teams are qualified to the highest of standards; this serves not only to protect our freehold clients but also the leaseholders whom we advise and assist on a daily basis. I am confident that we will see a number of regulatory and legal changes in the not too distant future following the earlier consultation paper on unfair leasehold practices. These should set the foundation for greater change in the future and help achieve Mr Javid’s concept of a more ‘transparent’ and ‘consumer empowered market’. Those who strive to deliver the best possible service should have nothing to fear.
Daniel Harrison
Managing Director
