In order to assist we have outlined, as an expedient, a few pointers we would recommend members follow when seeking advice or wishing to register complaints about excessive service charges or exploitative practices.

Checklist:

Depending whether you are in a retired or non retired development, refer to your copy of either the Association of Residential Managing Agents (ARMA) or the Association of Retirement Housing Managers (ARHM) Code of Practice which you should find in a file available in your building or in your Residents’ Lounge. These Codes of Practice have been prepared to promote best practice in the management of leasehold properties specifically designed for private leasehold and retirement housing. The ARHM Code sets out the statutory obligations which apply to the management of retirement leasehold properties as well as other additional requirements with which Managing Agents should comply.  Chartered Surveyors who are members of RICS agree to be bound by the RICS code of practice.  They have two, one for residential, one for commercial.  It should be noted that none of these codes of practice are legally binding and there is no authority to “police” them.

If, after following the complaints procedure by writing to your managing agent, you feel the response is unsatisfactory or indeed you have had no response, send copies of all correspondence, photographic evidence and documentation to the appropriate person following :

New Chair of the ARHM, Debbie Matusevicius   

Quote from the Anchor website: Debbie commented: “The ARHM is widely consulted on various matters by the Government and professional bodies alike. Anchor is a founding member of the Association and has been represented on the Board by Cecilia Brodigan (National Leasehold Manager) andmyself, for the last two years. This places Anchor in an excellent position in terms of influencing any future legislation that may affect our customers.”

Our comment: This goes to show how little either of these two have influenced ARHM policy or their complaints procedure/business practises.  To our knowledge, neither of them have ever answered any complaint effectively and it will be interesting to see whether this now changes.    We have met Cecilia Brodigan in the course of investigating a complaint that did not get fixed without the intervention of someone else at Anchor for 18 months.  (Anchor have 6,800 retirement properties under management.) Several blocks have walked with their feet in the recent few weeks and have gone to RTM, and others are taking them to the LVT – hardly a ringing endorsement for their management style.

We are not holding our breath re the ARHM as no Business Manager has been appointed since Paul Maton left 6 months ago.  They have less than 60 members and limited income to do anything.  Deputy Chair, Bernie Rose left RLHA in early 2012 after Lorraine Collis (ex Peverel) took over as CEO, so is unlikely to remain in post.

A N Other to be named, Business Manager, ARHM – THIS POST SEEMS UNLIKELY TO BE FILLED

Association of Retirement Housing Managers (ARHM)
Southbank House
Black Prince Road
London SE1 7SJ

Tel: 0207 463 0660, email: enquiries@arhm.org

ARMA, CEO Michelle Banks, new Technical Officer appointed replacing John Mills.

178 Battersea Park Road, London, SW11 4ND

Tel: 0207 978 2607, email: info@arma.org.uk

RICS, David Dalby

Director of Residential Faculty
RICS  (Royal Institute of Chartered Surveyors)
Parliament Square
London SW1 3AD

Tel: 0207 222 7000, email: ddalby@rics.org

HOS Rafael Runco –  click here for our dedicated page for Housing Ombudsman Service information

Housing Ombudsman Service       (NOT FOR SERVICE  CHARGE COMPLAINTS)
81 Aldwych
London WC2B 4HN

Tel: 0300 111 3000, email: info@housing-ombudsman.org.uk

YOU SHOULD ALSO WRITE TO YOUR MP – we have been advising this for a long time.  If we get sufficient MP’s to note the issues, they will help back the requirement for statutory regulation.

Additional Campaign against retirement leasehold exploitation Advice – also see What you can do page

Engage as many of the next generation, younger members of your family or friends who, on your behalf, can assist with negotiating, correspondence and IT access. Many ‘children’ and in some cases, grandchildren of residents are already active members of Campaign against retirement leasehold exploitation

Contact LEASE  (Leasehold Advisory Service)

Maple House, 149 Tottenham Court Rd,
London W1T 7BN
0207 383 9800
www.lease-advice.org

LEASE is funded by the Government to provide free legal advice to leaseholders, landlords, professional advisers and managers on the law affecting residential leasehold in England and Wales. Nicholas Kissen is one of their solicitors, the CEO is Anthony Essien.

Form a Residents’ Association (click here for our dedicated FPRA page)

The Federation of Private Residents’ Associations Ltd (FPRA) advises eligible Residents’ Associations to seek recognition, because by comparison with individual leaseholders, legislation confers on recognised Residents’ associations additional powers and rights.  The strength of a well-supported Residents’ Association lies in its capacity for collective action, however as few as six residents can form an effective Association.  The FRPA also seeks to assist with the problems encountered by the growing sector of retirement leaseholders.

The Federation of Private Residents’ Associations Ltd
PO Box 10271
Epping
CM16 9DB

0871 200 3324

info@fpra.org.uk

IMPORTANT NOTE: You do not need to conform to your managing agent’s Residents’ Association model

Meet and engage with other developments in your area.  As many as six developments can be situated within two miles of each other and shared experiences together with collective action can be effective and constructive.

The Property Ombudsman, contact them if who you wish to complain about is a company who is a member of their scheme. http://www.ombudsman-services.org/property.html Tel: 0330 440 1634 or 01925 530270

Larger developments are making a greater number of applications to the Leasehold Valuation Tribunal for determination of service charge disputes.  The results of these are written up in the News section and the link to the decisions page of the relevant website appears on the What you can do page.  Property Managers are being fined large sums of money for malpractice.

The FPRA acts as a lobbying group to instigate both legislative and practical change in the residential industry.  During the meeting the abolition of exit fees was added to the list of campaign priorities which included amongst others disability issues; insurance commissions; regulation of Managing Agents; car clamping and LVT procedures. The FPRA is a not for profit advice support organisation for private leaseholders, Residents’ Associations and Management Companies.

CarlEX, LEASE, AGE UK and Peverel recommend that all developments form a Residents’ Association. You don’t necessarily have to achieve 51% membership of your block to gain recognition by your Managing Agent. If you wish further advice on forming an Association please contact the FPRA direct using the link on the right hand panel of this page.

Residents’ Associations can become members of the FPRA regardless of being recognised.

The FPRA is offering a concession to any CarlEX member who wishes to join by waiving the £50 joining fee. Telephone 0871 200 3324 and quote CarlEX offer.

FPRA PRESS RELEASE 16.1.12

	P O Box 10271EPPINGCM16 9DBTelephone Number:0871 200 3324
The Voice of Flat Owners	TTE-mail:    info@fpra.org.uk Website: www.fpra.org.uk

Press Release from The Federation of Private Residents Associations Ltd.

Embargo: 00.01am Monday 16th January 2012

 

Our call for new high standard of management for blocks of flats head to the House of Lords

 

The Federation of Private Residents Association (FPRA) have today welcomed news that Conservative Peer Baroness Gardner of Parkes has taken up the FPRA campaign calling on the Coalition Government to introduce a minimum standard for private sector property management for blocks of flats

Baroness Gardner’s question calling for a new statutory code of practice for all those carrying out property services in the flat management sector has been tabled for Lords Question time tomorrow (Tuesday).

The FPRA and a wide section of property professionals took part in a Department of Communities & Local Government (DCLG) task and finish group in 2009 to look at the issue and the group reached the general consensus that some form of independent redress was required for long-leasehold home owners to raise the standard of the property management industry.

FPRA Chairman Bob Smytherman said,

“The Coalition Government’s policy to rely on self-regulation has resulted in a very patchy level of service to us flat owners with the sector relying heavily on the vested interests of trade associations such as ARMA (Association of Residential Property Management) and the Royal Institute of Chartered Surveyors (RICS) who both tend to put the interests of their members before the flat owners that they are supposed to serve, equally there are some excellent property managers who see little or no value in being a member of a trade association choosing instead to concentrate on excellent customer service.”

“The RICS Code of Practice is not only voluntary for property management companies it is virtually unheard of by most flat owners, equally there are around 50% of property managers who don’t even belong to any trade association despite collecting and holding large amounts of service charge funds often amounting to millions of pounds and not covered by any code of practice or regulation.”

“We believe the only way to get the ‘rogues’ out of the sector is to have a compulsory independent licensing scheme with a high minimum standard, along with severe penalties for breaches of those required standards. There are over 2 Million flat owners who need proper protection from the loopholes in the present arrangements and we welcome Baroness Gardener’s intervention.”

“Unfortunately Commonhold provisions in the 2002 Act were poorly drafted and, as a result, Parliament’s intention to create an entirely new form of tenure has almost completely failed. We believe remedies could include making it compulsory in all new developments, a right to convert from leasehold in existing blocks by a simple majority decision.

“Another major concern are the insurance commissions that many Freeholders & their Managing Agents make at the expense of flat owners who are usually required to pay for insurance of the structure of the building via the service charge, added Bob.”

“Many freeholders and managing agents see this as a profit-making opportunity and the whole insurance market for blocks of flats is, as a result, distorted by the payment of excessively high commissions and quasi- commissions in various guises to brokers, intermediaries and others, often amounting to 30%, 40%, 50% or even higher percentages; thus, the premium charged to the flat owner is substantially higher than it should be.”

“Although legislation requires that service charges, including insurance, must be ‘reasonable’ and if not, is referable to a Leasehold Valuation Tribunal; however, unlike other charges, such as maintenance, cleaning, etc. in the case of insurance, the protection afforded by the law is ineffective.’

The FPRA have proposed to Government a similar regulation such as in the Life and Pension market so that unfair commissions are banned altogether to protect leasehold flat owners from inflated insurance premiums. We believe the earning capacity of legitimate and responsible insurance brokers and others would not be affected as transparent fees at a reasonable level could still be charged and fully visible to flat owners on their service charge account.” It is often claimed by some professionals that commissions are already transparent and this may well be the case with good property managers, however we are aware that this is not always the case for all flat owners as ‘hidden’ commissions are frequently paid direct to freeholders without the knowledge of the flat owner concerned. Many property professionals’ only disclose commissions on request as required by the RICS code and not automatically therefore the vast majority of flat owners would not even know of this abuse or their right to challenge it. Another concern we have in the current unregulated system is for the majority of flat owners who are obliged to pay advance payments and contributions to sinking/reserve funds.

Media Contact:-

Bob Smytherman (Chairman)

Federation of Private Residents’ Associations

Main Telephone Number:

0871 200 3324

Direct email: bob@fpra.org.uk Mobile: 07867 562538

NOTES TO EDITORS

It is simply a scandal that a large sum of flat owners’ cash that is paid to secure a high standard of maintenance to their homes is held by unregulated and unprotected managing agents. We estimate this may well exceed £1billion and perhaps may be even higher. We are not aware of any other sector in the UK where such significant funds held by a third party are totally unregulated and can in practice be a person or organisation without any qualification who sets up a property management business, irrespective of experience or even of a criminal background but nevertheless is able to take and hold these funds on behalf of flat owners.

This situation has on occasions resulted in flat owners being defrauded or otherwise losing funds. Bizarrely, there is a whole statutory scheme of protection for rental deposits but none for leasehold home owners service charges who are obliged to advance much greater sums to look after the buildings in which they live, it is true legislation requiring deposits to be held in “trust” is in place but this is very difficult to enforce in an unregulated sector in practice. It is, in our view absolutely essential that some system is devised so that such funds are protected by the Financial Insurance Services Compensation Scheme or similar. Even if the funds are held in deposit accounts, because of the current limits, protected only up to £50,000 this may well be adequate for small blocks of flats, in the event of failure of the banking institution in question however larger blocks of flats would have minimal protection in such a situation.  This could be addressed by a very simple change in the Financial Services Authority (FSA) rules by stating that, where monies are held in trust for leaseholders, the compensation limits would apply to the individuals and not to the total sum. We also think there should be an annual audit for every managing agent by an ‘independent’ regulatory body (not the trade association) and obtain approval with sanctions to agents failing to comply. We believe all of this could be achieved at minimal cost to government with substantial savings to every flat owner in England and Wales.

We hope that their Lordships’ house will be able to suggest some solutions which will greatly improve the lives and financial protection for over 2 million of flat owners. Further problems relating to the leasehold sector have been highlighted by the FPRA to Government in our publication ‘Forgotten Leaseholders’ which is available on our web-site and was produced last year to mark 40 years of being the only independent organisation representing the interests of long-leasehold flat owners.

Full Question to House of Lords Question Time – Baroness Gardner of Parkes to ask Her Majesty’s Government whether they will introduce regulations or a code of practice to set standards for managing agents for leasehold blocks of flats.

 

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