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Opinion REGULATION Givingthe ARMA


Sharper teeth


tIGer announcedattheirannual


conference in October that they are aiming to bring stronger


self-regulation to theirmembers. Will thismake agents more


accountable to flat owners, ask pAul CRook and suepetRi?


ARMA’s pRoposed newself-regulation regimeis likely to be in the form of an independent board and a shift fromtrade organisation to apositionmoreakinto professional bodystatus. This wouldbe supportedbysomesortofkitemark-currently beingreferredtoasARMAQ–which aims to give thepublicincreased confidenceinARMA members and greater consumer protection. Residentialpropertymanagementinthe


privatesectorhas developed so rapidlyduring thelast20years that it has nowreached a pointwhere it is unrecognisabletoanyone who owned a leasehold apartment prior to the1990s.However,the challengesfacing propertymanagers arenow fargreater than they have ever been. It is interestingthatthe industry (as


represented by ARMA) would welcome a statutoryframework.Despite alonghistory of consumer concerns raised by leaseholders and thegroupsthatrepresentthem, successive governmentshavetendedtolargely ignore theissueofleaseholdregulation. Thecurrent government,soonafter taking office,made it clearthatregulationofthe industry wasnot a priority, preferring instead to leave the market to itsowndevices.ARMAmembers have nowdecided that a more formal framework of self-regulationisthe only option open to themif thereputationofthemajority in the industry is to be protected. No oneshould underestimate the size of this challenge andalthoughthere is no reluctance on the part of ARMAtoembark on this process, its


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achievementwillbehardwon andinherently compromised withoutthe forceofstatute. Regulation - even self-regulation-would


forceconsolidation in theindustryand might represent the best opportunity to professionalise theservice.The transition fromfragmented cottage industry to fewer larger playerswould hopefully provide both theincentive andcapacityfor long term investment,inbusinesssystems,processesand the skill sets necessary tomeet the challenges facedbyresidential propertymanagers and theircustomers onadaily basis. Sowhyisregulationinthe residential


propertymanagement sector so necessary? Largelythe problemliesinthe fact that the industry is so fragmented andthe barriers to entryremain low. Although thereisan established trade body(ARMA)torepresent theindustry, at present thereisnosingle body focusedonthe interestsofthe individual propertymanager or the development of a ‘profession’.Several organisations(IRPM, RICS) currently vie for this role. In comparison to othermodern professions, it lags far behind. Even itsdirectcomparatorinthe public sector (the Chartered InstituteofHousing)looks lightyears ahead. This is an issue that surely needstobeaddressed if residentialproperty management is to secure professional legitimacy andtakeits placealongside the likes of theRICSinthe contextofcommercial propertymanagement. The benefits of a regulated industry that immediately spring to mind are threefold.


Improved StandardS of profeSSIonalISm


Clearguidelinesalready existformanaging agents, in the form of the RICS and ARHM codesofpractice. Thesecover allaspects of best practice relating to residentialblock management.Despite this,evenamonglarger and supposedly reputablemanaging agents therehas beenagreat deal of discussion and publicitysurroundingmajorfailingsintheir systemsand procedures.Without regulation, best practice is atoothless tiger–taken seriously by reputable agents but ignored by less scrupulous firms.


Greater


fInancIal SecurIty Thosemanagingagentswho abidebythe RICS ServiceChargeResidentialManagement Code of Practice ensure that all service charge funds areheldintrust andare ring-fencedsothat they canbeusedonlyfor appropriate service


...theproblemlies in the fact that theindustry is so fragmented and thebarrierstoentry remain low


Spring2012 Flat Living


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