Flat-Living.co.uk ARMA news round-up
NEW SERVICE CHARGE ACCOUNTING
REQUIREMENTS EXPECTED IN APRIL 2010
david hewett, Chief executive of ArMA reports
t is seven years and six months since the Commonhold the conduct of our members,” concludes Williams, “and will report
I
and Leasehold Reform Act 2002 received the Royal Assent, to us if a member is found to be seriously wanting. We see this step
but at the time of writing the last two crucial sections still as bringing us to the level of redress that we want to be able to offer
have yet to see the light of day. to our members’ clients and customers.”
ARMA has always seen that these two sections on accounting Lewis Shand Smith, Chief Ombudsman of SOS, adds: “We are
for and holding of lessees’ service charge funds as the most important delighted that ARMA has decided that its members should join the
of the leasehold reforms in that Act. Although the Government has Surveyors Ombudsman Service. As a professional ombudsman
indicated a commencement date of 6.4.10 , there is now growing scheme we are happy to welcome any firm which provides services to
concern that, because the relevant Regulations have not yet been the property sector. Our members include Surveyors, Estate Agents,
published, there may not be time to prepare for that date and therefore Managing Agents and Letting Agents. In such a difficult economic
there may be a further postponement. climate it is essential that we work together with the property industry
Whether self-managing or using the services of a managing to give confidence to consumers that if things go wrong, effective
agent, we still have no final idea what the required separate bank independent redress is available.”
accounts must be called nor how they will have to operate. Many
residents management and Right to Manage companies are likely
to have to open a new bank account (there are over 60,000 of them) MAnAgeMenT ChAirMAn geTs The
and managing agents still using a single client bank account will
be faced with opening an account for each client. Will the banks
go-AheAd For A Third YeAr
be able or willing to do this in just a few short months? And will the
Critical factors affecting the managers of residential long leasehold
banks even understand what is required of them?
property have led to the chairman of the Association of Residential
A similar problem arises with the new, prescribed annual summaries
Managing Agents (ARMA) being appointed for a third year in office.
of accounts which, on an accruals basis, will require an income and
Talking to members of the Association at a packed annual general
expenditure account, balancing statement and details of movements
meeting Brett Williams explained why he was offering himself for election
on reserve funds. Time will be needed to revise accounting procedures
for the extra term over the normal two years. “For some while now we
and adapt related software.
have been working on three key step-changes for our sector in the form of
As soon as the Regulations are available, ARMA will be publishing
mandatory regulation, an OFT-approved redress scheme and nationally
a detailed Lessee Advisory Note on its website www.arma.org.uk
recognised standards. I have asked for and received unanimous
and, of course, the next issue of Flat Living will have a full report.
support from ARMA’s members for the extra time to see these through or
make substantial progress before I stand down.”
Brett, who is a chartered surveyor
FirsT oMbudsMAn AppoinTed For and fellow of the Institute of
residenTiAL LeAsehoLders
Residential Property Management
is a partner at Curry & Partners
Residential leaseholders have recourse to independent in Birmingham.
adjudication on disputes through Leasehold Valuation Tribunals
and even the Courts but these can be time consuming, costly and
often have little jurisdiction over many of the disputes that arise. 8
Complaints relating to matters such as poor communication, not
delivering the promise and accounting issues fall into the category
of outside the LVT and Court jurisdictions.
As a result, and in line with government policy, the Association of
Residential Managing Agents (ARMA) has now made it a requirement
that its members must belong to a fully recognised ombudsman
scheme. While ARMA members can join the Housing Ombudsman
or the Property Ombudsman, the recommended scheme for its
members is the Surveyors Ombudsman Service (SOS).
“It was a logical step for us to go for SOS as nearly 50% of our members
are Chartered Surveyors and SOS was set up by the Royal Institution
of Chartered Surveyors for its members,” comments Brett Williams,
ARMA’s chairman. “Furthermore SOS is already handling cases relating
to residential leasehold issues.” [See the SOS’ annual report at www.
surveyors-ombudsman.org.uk].
In future, leaseholders in properties managed by ARMA members will,
after they have gone through the member’s own in-house complaints
procedure, be able, at no cost, to take their complaint straight to the
ombudsman. If the complaint is found to fall within the ombudsman’s
jurisdiction, an entirely independent review of, and decision on, the
case will be made. The decision, if accepted by the complainant, is
then binding on the member.
“It will now be the independent ombudsman who will investigate
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