© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
If we think about all areas of our personal life, one thing tends to dominate our grievance time and again: poor service. If you’re out shopping, you expect service; if you go for a meal, you would be outraged if you weren’t looked after; you spend your hard-earned money on a holiday, you would not tolerate a hotel failing to look after you.
Why, then, are the standards of management service in this sector generally so low? There is the argument that fees are not high enough to substantiate good service. This is self-defeating. If standards remain poor there will never be an end to the vicious spiral. Poor service begets low fees begets worse service, and so it goes on.
Let us look at who is the client. Quite simply, all stakeholders are the client, whether they are residents, owners or freeholders. The residents deserve the place to be well looked after. The owners either live there or have the property as an investment and, therefore, want the place looked after to see values and rents rise. The freeholders want the place well managed so that they don’t get bombarded with complaints from lessees and lose their insurance commission because of right to manage. It is impossible to please all the people all the time, but it surely behoves management companies to try and please them some of the time.
Regulation is always seen as a cure-all and there are those who feel all the problems of inferior management will be solved through legislation. Remember Robert Maxwell? Legislation has done nothing to stop companies mismanaging pensions. In any industry or business, if some rotten apples want to be bad, all the legislation will not stop them.
Is it really worth a group of owners taking an expensive litigation route because a managing agent has gone ahead with a change in lift flooring when specifically asked not to? How do you explain to an estate that they don’t have any reserves built up, the agent has just never reconciled the service charge? How does an owner complain about an agent who racks up legal fees chasing the wrong person for service charge?
These are real situations from real estates. If ARMA and the RICS won’t take enforcement of regulations on their own members seriously, how are cost-effective solutions going to be devised under any legislative regulation? For example an agent who failed to keep accurate records of collecting service charges and billed credits to some owners in error were absolved of wrong doing by both ARMA and RICS without thorough investigation, because their member said it was a computer error and, therefore, the bodies felt no checks were needed!
Can regulation of the industry assist? Well, generally for property we have an intrusive and ineffective legislative system that seems to pick off the wrong areas. The legislation that has come in on property generally results in restrictions on the good guys, which the bad guys ignore, and the cost of taking action is much greater than the benefits.
We have seen with FSA Insurance Regulations that landlords still take excessive insurance commissions and that despite the form-filling nothing has changed.
This brings me round to the Arbib case and where freeholders make money from blocks of flats. How can litigation be called to resolve what anyone with common sense can see is profiteering from one person’s circumstance? A lease is a dwindling asset and to not have a fair formula for calculating the value seems extraordinary. Now this would seem like the utopia of fairness, which may never be achievable. It is probably unachievable because of vested interests.
In essence, whatever is attempted through legislation or regulation someone will always ignore it, find a way round or blatantly flout it. Surely common sense should prevail to say that we must all provide the work that we are paid for? Similarly, the only way the management industry will see respect is by earning it.
Through earning respect the value and benefits of the service will be appreciated and consequently a fair price will be paid for a fair job. At present the fees being paid to some probably do represent very poor value.
All the legislation in the world will not ensure good training, good disciplines and good service. That comes from the culture of an organisation and its leaders. If a survey were carried out of management companies, it would probably reveal most believe that they are doing what they need to. It is surprising how often people say they audit their service charges within 3 months of a year end but when you ask for the last service charge year’s accounts after 6 months there is always an excuse why they haven’t been audited.
So perhaps regulation of the management industry is needed to try and protect the public but if the desire genuinely existed to raise standards then all sectors would get together to weed out the bad guys. Or could it be that the standards are so low that no-one really has a desire to make improvements. After all we are all members of the public and have the ability to expect more, but you wouldn’t want to start doing fluffy service stuff. Who’s going to pay me for that?