OFT to investigate activities of leasehold property managers

OFT to investigate activities of leasehold property managers

19:04 PM, 5th December 2013, About 11 years ago 53

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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. OFT to investigate activities of leasehold property managers

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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Comments

NewYorkie

14:12 PM, 10th December 2013, About 10 years ago

Reply to the comment left by "Annette Stone" at "09/12/2013 - 20:48":

Annette, I do feel for 'honest' property managers not in league with freeholders, whose reputations are polluted by the rogues of the industry. The names of the usual suspects are littered through the dealings of the previous LVT; Peverel, Tchenguiz, SGIK, Adderstone, Forte, Hurst... Unfortunately, I am dealing with many of them.

They are all involved in Yorkshire-located blocks; one even falsified evidence to my mortgage provider to con them out of £900 just before selling the freehold, and which I now have to fight. We have one RTM (soon to be RTE) and are going for the 2nd RTM and the freeholder is fighting hard to protect their nice earner. My London block has always been managed by the owners/Directors, and while we are facing some tough decisions on future service charges, everything has always worked out fine. We have just engaged a property manager for the first time, and are hoping for the best, but I appreciate your offer.

Annette Stone

15:25 PM, 10th December 2013, About 10 years ago

Thanks Lou. We are always happy to help where we can and I appreciate your comments. Some of us treat this as a profession and find it quite sad that a debate generates such anger. I absolutely sympathise with many of the comments made and none of the contributors should think otherwise but I am a bit preturbed by the fact that other than early on no other managing agent has contributed as I am sure there are others who feel as I do.

NewYorkie

16:04 PM, 10th December 2013, About 10 years ago

Reply to the comment left by "Annette Stone" at "10/12/2013 - 15:25":

Annette, I'm sure there are others who feel as you do, but I suspect there are plenty who would risk the wrath of other contributors if they make comments they know can and would be criticised. So, best to say nothing!

John Daley

15:26 PM, 11th December 2013, About 10 years ago

Reply to the comment left by "Lou Valdini" at "10/12/2013 - 13:55":

If you follow the link posted by Joe Bloggs the records of the RICS Disciplinary panel show that they do expel and fine tens of thousands of pounds quite regularly.

In your case I have to assume they were not conviced on the evidence as a £100 penalty is no more than a slap.

Joe Bloggs

15:36 PM, 11th December 2013, About 10 years ago

ive had a few dealings with this chap and the disciplinary action was not before time. amazingly though he has the temerity to state on his website that he exceeds the standards imposed by the RICS! There are a lot of bad people out there in all walks of life.

Chris Amis

22:51 PM, 11th December 2013, About 10 years ago

Don't forget a lot of MAs even sign up to an ombudsman scheme.

So for instance with the "Ombudsmen service" you can take a complaint to them so long as it does not involve "a matter which it appears would be more appropriately dealt with by a court, by arbitration, by a sector regulatory determination or under another complaints or conciliation procedure".

Not quite sure what that leaves 🙂

Shakeel Ahmad

20:28 PM, 12th December 2013, About 10 years ago

"There are a lot of bad people out there in all walks of life."

Agree, but than one does not have to deal with them. Where a so called professional body or with the badge of " Royal" one expects that these bodies will take matters very seriously and not encourage them by not taking a timely stringent/appropriate action.

An average person has been led to believe in them and in most cases the person expects these bodies to be the first line of reliance.

The working of these bodies is akin to a third world set up.

Fed Up Landlord

11:05 AM, 13th December 2013, About 10 years ago

OFT is not before time. I have just managed to get a Lands Tribunal RTM decision some 10 years after starting the process, and two years after getting an LVT decision. Just waiting to see if Freeholder / Managing Agent ( SGIK/Hurst) try and appeal to Court of Appeal ( unlikely I think) We have been told that they will charge us a cancellation fee of many thousands when they have to hand over management to the RTM Company. So looks like another trip to LVT hearing to argue that one. Anybody had this happen and did the Freeholder / Agent get away with it?

Chris Amis

11:16 AM, 13th December 2013, About 10 years ago

If any of the LHs in the block are not LLs then the terms on the contract that you got entered into by the FH possibly without even seeing them would surely be subject to the unfair terms rules.

Was that a 'simple' no-fault RIghtTM or were you forcing through (begging for) a change of manager (section 24?).

Chris

Fed Up Landlord

11:41 AM, 13th December 2013, About 10 years ago

Hi Chris,

A "simple" no fault RTM. Not quite so simple. It has sorted out the issue once and for all about RTMs taking over multiple blocks on large estates though.http://www.landstribunal.gov.uk/judgmentfiles/j991/LRX-11-02-99-2013%20182-2012%20_2_.pdf

Checking the lease there is nothing in them, or indeed in the RTM legislation that says we are tied into a management contract and have to pay cancellation charges. So an application under Section 88(4) of the Act is in the offing I think

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