The law should be changed to enable flat owners to act against poor property managers, according to the Competition and Markets Authority (CMA).
During an eight-month study, the CMA found that many leaseholders suffer from poor property managers through excessive changes or poor service. As a solution, it is recommending that new laws be put in place to allow flat owners to remove rogue managers through a vote.
Rachel Merelie, a senior director at the CMA who led the study, said: “Many property managers provide a good service to leaseholders, but protection against the worst failures by property managers is vital, because when problems do occur, they have a major impact on leaseholders.”
Included in the CMA’s recommendations are proposals for property managers to set out clear improvement plans, the provision of a new mediation service and clearer details about service charges and ground rent earlier on, in the estate-agent stages.
In addition, it is recommending a series of voluntary changes aimed at improving transparency between property managers and leaseholders. However, it is not advocating regulation within the sector, as is already the case in Scotland.
The Association of Residential Managing Agents (ARMA) has responded by saying it is already working to improve standards. This, it said, began earlier this year with the introduction of a new consumer charter called ARMA-Q, which improves transparency and provides a better system for redress.
However, it conceded that there is still room for improvements.
“From next year, all our members will have to be accredited to ARMA-Q, which enforces best practice,” said Martin Perry, ARMA’s chairman.
“We want our ARMA logo to be the badge of excellence.”
Whilst the voluntary changes can be expected in the short-term, changes in the law are unlikely to be enacted until the next parliament.