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2 Federation of Private Residents’ Associations Newsletter

Issue No. 90 Autumn 2009

Seven Years On: Another Consultation on the Regulation of Managing Agents

By Stephen Guy, FPRA website editor

Back in 2002 the government published a bold consultation paper on the regulation of managing agents. Nothing came of it. Now, seven years later, the government is again consulting on the regulation of managing agents. This time though, you could be forgiven for missing it, as it’s tucked away inside a consultation on the private rented sector.

To be more precise, the consultation can found in pages 21 – 24 of the 36 page report entitled “The Private Rented Sector: professionalism and quality. The government response to the Rugg Review”, published by the Department of Communities and Local Government (DCLG). There are no obvious clues in

that title for leaseholders interested in commenting on the issue of regulating agents. Fortunately the FPRA was invited to participate, and chairman Bob Smytherman will be attending meetings to put the FPRA view.

The inclusion of managing agents in this consultation has come on the back of interest in regulating letting agents. The DCLG believes that any regulatory regime for letting agents should also include managing agents working in the leasehold sector, as they wish to avoid creating dual burdens on managing agents that work across both sectors. One of the questions the consultation asks is whether there should be a single regulatory scheme for both types of agent.

A read through the consultation paper suggests the DCLG is committed to the idea of regulation. It recognises that in ‘this modern age’ it is not appropriate that someone without any qualifi cations can

set themselves up as an agent, a job which includes responsibility for leaseholders’ service charge funds. No other sector allows large sums of clients’ money to be held in a completely unregulated environment. The DCLG says it has been “persuaded by the powerful arguments put forward not only in the Rugg Review, but by the Law Commission, and Professor Carsburg, for full mandatory regulation of private sector letting agents and management agents. Our stakeholder engagement has underlined this as a key measure if we are to improve consumer confi dence in the sector.”

It envisages a non-governmental independent regulatory body, an entry requirement for those wishing to enter the profession, a code of practice for members, protection measures to ensure the safety of service charge funds, compulsory professional indemnity insurance, complaints procedures, and

Majority of Private Rental Properties “Not Ready”

Over half of private sector rental properties in England and Wales are still not fully ready to go digital, despite the fact that switchover has already begun, according to research carried out by Sky. The company carried out detailed physical surveys of 129 blocks of fl ats, in order to obtain a snapshot of the current situation nationwide. It found that 57 per cent of those surveyed still have work to do.

Sky’s specialist team visited 129 blocks, each containing between 4 and 66 separate fl ats (a total of over 3,000 individual homes), and undertook in-depth physical surveys of the buildings to ascertain their status as regards to digital switchover. The surveys found that for many properties there is still work to be done. Of those blocks surveyed, 30 per cent need minor work carrying out, such as fi tting new fi lters or boosters, whilst others need to undertake major work, for instance replacing all old cabling or installing a suitable digital transmitter. In fact 19 per cent of the buildings visited need completely new systems.

This research supports fi ndings from Digital UK, the independent,

non-profi t organisation leading the process of digital TV switchover in the UK, which estimates that a third of private landlords are unprepared.

Pascal Wharton, Head of Sky Communal Solutions, said: “We suspected that not everyone would be ready for digital switchover, but were surprised by some of the results – especially for areas due to go digital in the near future. The majority of communal systems will need some work carried out, such as a change of cabling, especially if the block is over 10 years old. Although most people we visited only needed to undertake minor work, we would still warn them to resolve the problems sooner rather than later.

“Recent fi gures from the National Audit Offi ce appear to suggest that awareness of digital switchover is lower among residents in privately rented accommodation, compared to the population as a whole. Rented fl ats are usually dependent on a communal TV system and it is up to landlords to make the necessary changes so that residents aren’t faced with a blank screen when switchover occurs’’.

The properties surveyed were spread throughout England and Wales and the results give an indication of the situation across

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