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ISSUE No.110 Autumn 2014


An ongoing investigation into residential property management services (reported in issue 109) by the Competition and Markets Authority (CMA), has identified a number of causes for concern about how the market works for leaseholders.

The CMA (formerly the Office of Fair Trading) says: “Some leaseholders appear to suffer from a lack of control over aspects of property management, and may experience excessive or unnecessary charging for services arranged by property managers, poor service quality, insufficient transparency, poor communication and ineffective redress.

“At the same time, other leaseholders are satisfied with their property management services and the CMA has found evidence to suggest that the existing checks and balances in the market can work well.

“In light of this, the CMA has set out some views on possible remedial action to improve the performance of the market and secure better outcomes for leaseholders, on which it is seeking views:

“We are considering:

• Measures that would allow leaseholders easier recourse to RTM and encourage the use of RMCs, which are intended to make these work more effectively. We are also considering options which allow leaseholders influence over the appointment of property managers without going to the extent of acquiring RTM. We are also considering measures to increase transparency so that property managers can be


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more easily held to account with recourse either to redress or means to allow leaseholders to influence their freeholder, RTM or RMC to market test the property manager.

• Measures that place greater control with leaseholders.

• Measures designed to provide greater transparency on certain incentives such as fees and commissions on work done and insurance, or on the use of related companies.

• Measures to facilitate the creation and functioning of RTM and RMC companies, and residents’ associations, and to provide more information on leaseholder rights and responsibilities.

• Remedies designed to ensure greater clarity and availability of information, including information so that leaseholders can


THE DATE Our AGM is on November 10, 2014

at Kensington Town Hall, London.

assess costs and service (of a particular property manager, and of owning a leasehold property) in advance and to facilitate benchmarking of services and management charges between property managers.

See back page for details.

• In order to promote greater competition to ensure the quality and value of incumbent property managers and to facilitate switching where appropriate, measures that could promote the ease of switching and increase its potential use. In part, this should arise from some of the measures which give more control or influence to leaseholders (and easing their coordination), aligned incentives and better information.

• Measures to improve the functioning of existing redress mechanisms and to extend the scope of these systems or create effective additional or alternative safeguards.”

If you haven’t commented yet, directly or via FPRA office, you can do so at: Residential Property Management Services Study, Competition and Markets Authority, Victoria House, 37 Southampton Row London, WC1B 4AD.

The consultation period ends on September 19, and the final report will be out at the end of the year.


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