OFT to investigate activities of leasehold property managersMake Text Bigger
The news that firms which manage blocks of flats are to be investigated by the Office of Fair Trading should be welcome to anyone who owns a flat in England or Wales.
Complaints about the management of blocks of flats and the activities of managing agents have been escalating in recent years, as more and more people are now buying flats. But until now it seems that most politicians have not been interested in addressing the concerns of flat-owners.
Flats are a popular choice for BTL properties. Virtually all flats in England and Wales are owned on leasehold title. In many cases the freeholder/landlord will be responsible for maintaining and insuring the building, with the flat-owners having to pay a service charge to cover the cost. Freeholders may manage the building themselves or frequently employ a firm of managing agents to do the work for them.
I see that readers of Property118 often raise problems which they have encountered with freeholders or their managing agents – extortionate charges for licences to sub-let, charging penalties for late payment of service charges, massive hikes in insurance premiums, etc., etc.
Now is the chance to make your views known. The OFT wants to hear from interested people and businesses about the priority areas of concern that may be preventing this market from working well for consumers.
A major area of concern has been that some management companies arrange maintenance contracts with companies in which they have a financial interest, rather than with companies that provide good value for money for flat-owners. They are also likely to arrange building insurance with companies that give them the biggest commission rather than the cheapest premiums.
Another frequent source of complaints is the hefty fees some of these companies charge when a property changes hands – first of all the seller will usually have to pay for an information pack that the buyer will need, and then there are fees for registering the new owner as well as any mortgage.
If you own a flat and have had trouble with the managing agents do contact the OFT. They are particularly interested in:
- Whether leaseholders feel that they have sufficient involvement in decisions taken about appointing managing agents, and if it is difficult to establish whether the property manager is providing value for money or a sufficient standard of service.
- Whether property managers and freeholders have the same interests as leaseholders in, for example, keeping down costs of maintenance work or buildings insurance.
- Whether there is effective competition, including evidence about how easy it is to switch between providers.
- Whether residents receive good value for money and reasonable quality of service.
- The time, effort and resources required to complain and seek redress.
Full details can be found HERE
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