Transcript Competition and Market Authority (CMA)

Competition & Markets Authority
(CMA)
“Residential property management
A market study”
Residential property
management services - a market
study
• Available https://assets.digital.cabinetoffice.gov.uk/media/547d99b8e5274a429000
01e1/Property_management_market_study.p
df
• Published 2 December 2014
• 168 Pages
• There is an Executive Summary!
The CMA Aims
Improve:
• Prospective purchasers’ awareness of
leaseholders’ obligations
• Disclosure, transparency and
communication between property
managers and leaseholders
• Leaseholders’ access to appropriate forms
of redress
Five Key Recommendations
• Pre purchase remedies
• Remedies to improve transparency and
communication, to be addressed via selfregulatory industry codes of practice.
• Remedies requiring legislative change.
• Remedies to improve transparency and
communication in blocks owned by local
authorities and housing associations.
• Redress remedies.
Pre Purchase Remedies
• Develop and provide guidance to
prospective purchasers pre-purchase
– estate agent provides a short information
sheet providing key information on major facts
about leasehold ownership
– estate agents prepare particulars regarding
the current level of service charges
– requirement to provide this information
incorporated into approved code of practice
followed by estate agents
Pre Purchase Remedies
• Develop and provide standard questions
at the conveyancing stage
– Standard set of questions is used at start of
the conveyancing process to ensure that the
prospective leaseholder has sufficient
information to make an informed decision on
the purchase
Remedies to Improve
Transparency and Communication
Industry codes updated (ARMA, RICS,
AHRM) to include:
• A clear statement for each property they
manage of:
– purpose and responsibilities of the property
manager;
– property management plans and strategy; and
– key information relating to past work
Remedies to Improve
Transparency and Communication
• The statement of key performance
indicators must include:
– actual costs for material projects incurred over
the last three to five years and
– the level of service charge and
– any fixed management fees.
• To be provided to leaseholders on a
regular annual basis.
Remedies to Improve
Transparency and Communication
• Disclosure of:
– what is included within the core management
fee and rates of management charges;
– administration and supplementary charges;
and
– commissions earned by the property
– full disclosure of corporate links
Remedies Requiring Regulation /
Legislative Change
• Two legislative changes:
– New legislation to give leaseholders rights to
trigger re-tendering and rights to veto the
landlord’s choice of property manager
– Review of section 20 rules (consultation with
leaseholders in relation to major works)
Local Authorities and Housing
Associations Remedies
• Share best practice
• Leaseholders costs to be identified by
block
– separate out the cost of providing services to
leaseholders and social rental tenants
– make clear the costs that are being incurred
by leaseholders for common services and
– explain the allocation of costs in an accessible
way
Redress Remedies
• Cheaper and quicker alternatives to taking
claims to the first-tier Tribunal
– Provision of independent advice to the parties
about the merits or otherwise of their case, or
– Dispute resolution (either early neutral
evaluation, mediation or other)
Any Questions?