© 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.
The Carsberg Report has called for the regulation of all property management, including property managed direct without agents: “there should be a statutory requirement for all relevant agents and landlords to be members of an approved regulatory regime”. I can’t see a great deal to argue with but, as with so many areas of leasehold reform, haven’t we been here before? The management industry, or at least the responsible part of it, has been advocating statutory regulation for more than 10 years. Government has ignored their proposals while continuing to wring its collective hands at the deficiencies of management in the leasehold sector preferring the alternative route of statutory controls through the 2002 Act provisions. Maybe it’s all a matter of the continued government perception of the management industry.
Leasehold management in the early 1990s wasn’t really very good, and in many cases absolutely terrible – highlighted of course by Mira Bar Hillel’s nightmare landlords campaign, taking up issues identified earlier in the Nugee Report on flat management. The Labour Party had issued its manifesto commitment to leasehold reform “An end to feudalism” in 1995, citing poor management practices as justification for its radical proposal of a right to manage (wonder what happened to that?) and Rowntree commissioned Herriot Watt University to produce an investigative report. Eyes were firmly focused on flat management, times were changing but the management industry wasn’t. ARMA, the Association of Residential Managing Agents, was up and running but still in its infancy so not as active as it is today.
The Rowntree Report Repair and Maintenance of Flats in Multiple Ownership pointed the finger directly at managing agents: “a wide range of complaints were voiced against the managing agents running blocks on behalf of freeholders. A number of respondents’ comments could be summarised under the heading ‘unresponsiveness’.” The report really put the boot in to managing agents who were generally painted as an unhealthy mix of Bill Sykes on a bad day and the Beadle in Oliver Twist – “Repairs? You want repairs?”. It referred to “excessive delays” in acting on requests for works, “there was concern about the extent to which on-going up-keep was guided by any forward plan”, and even worse “agents were regarded as unreliable in their supervision of contractors”, citing cases of double-charging to tenants. The final thrust to the already fatally damaged reputation of the industry was the statement “residents believed that the reputation of the management company alone had an impact on the market value of their flats “having X as an agent knocks 10 grand off the value”.
So, pretty bad press for managing agents and this, of course, influenced future government thinking. I’ve made the point before that legislation always reflects the situation prevailing before it was passed and much of the 2002 Act provision, and government attitude to managers, remain highly influenced by the state of affairs in 1997. This ingrown attitude is best summed up in the infamous quote from the government consultation paper on leasehold management of April 2002, “of course, to the best of our knowledge, only a small proportion of those involved in leasehold management are real villains”. So what are we saying here, that only some agents are villains or that all agents are villains, but only a few are real villains? Not good for on-going productive relationships.
Look what had actually been achieved by 2002, ARMA had by its own efforts grown substantially, to include over 75 per cent of practicing agents, had introduced a code of conduct and a disciplinary code to control standards and was improving agents’ competence through training, practice notes and newsletters. One of the major accusations of the Rowntree Report, lack of any professional qualification for managers, was addressed in the setting-up of the Institution of Residential Property Management in that year. There can be no doubt the industry had taken huge steps toward improving management services for tenants, without government assistance. How disappointing the industry’s own proposals for regulation were not then taken seriously by government.
Following the shocks of Rowntree, the thinking sector of the industry had rapidly concluded that a formal scheme of regulation would be the best approach to enforce standards but also, most importantly, to provide a means to remove bad performers from the market – to throw out the “real villains”. As a result ARMA devised, in conjunction with LEASE, a full proposal for a statutory regulation regime. This was under the aegis of the Leasehold Reform Working Party and was a fully worked-up and viable proposal, presented to government as part of the LRWP recommendations. Being devised by the industry, who understood how things worked, it was simple, effective and was devised as virtually self-financing. We didn’t get anywhere with it, the government sights were set on improving management through the controls of what became the 2002 Act and was unwilling to trust the concept of regulation, still influenced as they were by their unchanging view of managers as a generally untrustworthy bunch. Pity, it would have worked, but couldn’t of course proceed without the teeth that statutory provision would have achieved. ARMA has, of course, included much of the structure into its own self-regulation but remains without the necessary final sanction of preventing bad agents practicing.
Of course managers need a statutory scheme of regulation, but not for the same reasons it was needed 10 years ago. The management industry has changed drastically, standards and attitudes have improved, the dinosaurs are gone and professional competence is high. The regulation needed now is to offer protection to the manager as much as the customer. The flat management sector controls vast sums of other people’s money with virtually no controls and requires a level of technical competence and probity as high as other professions that are regulated. It seems more than usually déjà vu to see Sir Brian Carsberg’s recommendations, 10 years or so after government rejection of very similar proposals from the managers themselves. Maybe they’ll listen this time – a recommendation from someone called Sir Brian must be more reliable than one from a real villain of a managing agent.