The Government will not be asked to regulate the leasehold residential market.
However, an official study of the residential property management sector has thrown up some serious early concerns – including rip-off charges, ‘bungs’ from tradesmen, poor service, little transparency and bad communication.
The on-going study, which the Competition and Markets Authority has taken on from the now-defunct OFT, is looking at how blocks of leasehold flats and retirement properties are managed.
It includes both leaseholders who occupy their homes and landlords who rent their properties out.
Unusually, the CMA has issued an update on its findings, and asked for more information ahead of the study’s closing date.
The update says the FCA has already evidence of excessive charges by property managers; poor service; little transparency; poor communication; payments made to managers by contractors; poor complaints handling; and failure to consult residents properly on building works.
Leaseholders are more likely to be satisfied if they had exerted their Right to Manage, says the study.
However, it says the FCA has also heard of cases where RTM is difficult to obtain or badly run.
The FCA makes it plain it wants to stop short of legislation if possible, but has come up with a number of proposed remedies.
It says it has considered the statutory regulation of property managers, but is unlikely to pursue that route.
The Association of Residential Managing Agents (ARMA) gave a guarded welcome to the update, saying that ultimately, it believes that statutory regulation is the answer.
Responses to the consultation close on September 19.
The update paper is here:
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