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ISSUE No. 100 Spring 2012


This bumper issue of the newsletter celebrates our centenary edition. As we celebrate our 100th issue and our 40th anniversary year, we give three cheers to Baroness Gardner of Parkes for championing our cause in the House of Lords.

Lady Gardner (Trixie Gardner, formerly GLC Councillor and Lady Mayoress of Westminster, Conservative) is herself a leaseholder. In debates already this year she has called for a new statutory code of practice for all those carrying out property services in the flat management sector and drawn attention to leasehold issues and the failure of the Commonhold form of tenure during a debate on the Coalition’s housing strategy.

Baroness Hanham, Communities and Local Government Minister, replying, said that although there were no immediate plans for the statutory regulation on managing agents, she was aware that some managing agents caused leaseholders “real inconvenience and distress” and the Government was keeping a “close watching brief” on the issue and were not ruling out making changes.

Other Peers joined in to call for regulation and to criticise inflated insurance commissions. Baroness Hanham said commission was being investigated as there had been “many complaints” and she recommended all blocks have a residents’ association so they have some “muscle” against poor managing agents.

FPRA Chairman Bob Smytherman welcomed Baroness Gardner’s contribution to the debate and believes leaseholders are finally getting the attention they deserve from our law makers.

“Self-regulation results in a very patchy level of service for us flat owners,” he said. “The sector relies heavily on trade associations and professional bodies to maintain standards, but these organisations tend to put the interests of their members before those of the flat owners. Half of property managers don’t belong to any trade association or professional body – despite


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collecting and holding large amounts of service charge funds often amounting to millions of pounds.

“The majority of flat owners have to pay advance payments to sinking/reserve funds. It is a scandal that these large sums (estimate £1billion) can be held by unregulated and unprotected managing agents, even a person or organisation without credentials or experience or with a criminal background. On occasions flat owners have been defrauded or lost funds.

“There is a statutory scheme of protection for rental deposits but none for service charges of long-leaseholders, who have to advance much greater sums. Legislation requires deposits to be held in “trust”, but this is difficult to enforce in an unregulated sector. It is essential that such funds are protected by the Financial Insurance Services Compensation Scheme.

“The only way to get rid of the rogues is to have a compulsory independent licensing scheme with a high minimum standard and severe penalties for breaches. There should be an annual audit for every managing agent by an independent regulatory body. All this could be achieved at minimal cost to Government with substantial savings to every flat owner in England and Wales. It would greatly improve the lives of more than two million flat owners in England and Wales who need proper protection from the loopholes in the present arrangements.”



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