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ARMA-Q solves ARMA’s problems, not those of leasehold

May 16, 2013 by Leave a Comment

KeithHillSliderARMA-Q, the scheme to give ethical credibility to the Association of Residential Managing Agents, was given the blessing of the government and the leasehold establishment yesterday with a House of Lords launch.

Already the new ARMA-Q regulator Keith Hill (above), a former New Labour housing minister, has six cases of complaint to deal with “which I am going to get started on right away”.

Baroness Hanham, Under-Secretary of State, Department for Communities and Local Government, gave a cordial endorsement, saying that self-regulation was the government’s favoured solution to leasehold.

Leasehold tenure is going to increase and she was aware that, owing to different demographics and culture, there could be one or two problems with it (which is an odd way of seeing £1 million law cases, or pensioners facing a £30,000 legal bill because their “right to manage” has been thwarted).

She sang her boss’s praises for his amendment to the Enterprise and Regulatory Reform Bill that means managing agents will have to be members of an Ombudsman scheme.

This irrelevance was dreamed up to dump a crafty clause introduced by Baroness Gardner in the Lords, which would have paved the way to state regulation of managing agents – which has the unanimous support from all sides in the sector.

That is not to say that Mark Prisk, the housing minister, is deaf to leasehold issues – unlike his hapless predecessor – and another round-table of leaseholder insiders (with LKP in the naughty corner as an “observer”) will take place.

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House of Lords launch for ARMA-Q on May 15

April 5, 2013 by

The ARMA-Q initiative is set for a House of Lords launch on May 15, with the following letter from ARMA chief executive Michelle Banks sent to invited stakeholders:

ARMA-Q

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ARMA-Q: a qualified welcome, but it is not a new dawn

September 21, 2012 by

COMMENT

The Leasehold Knowledge Partnership broadly welcomes the draft ARMA-Q initiative, which may help resolve the less poisonous disputes in blocks managed by ARMA members.

It has also made suggestions to improve it: first, to make the disciplinary procedures public, like ours; secondly, to strengthen the requirement to declare ‘conflicts of interest’ to leaseholders.

It cannot be disputed that managing agents should tell leaseholders that their company is owned by the freehold-owning landlord. Or, that a managing agent is employed predominantly by one freeholder. These would be bars to LKP accreditation but, unfortunately, they exist with some of the ARMA membership.

It is also worth emphasising that many property managers have no intention of joining ARMA, which they believe has been collusive in the abuses of leasehold. The most spectacular examples in monetary terms of over-charging have been the handiwork of ARMA members. Nottingham-based Walton and Allen, an LKP member, “resigned from ARMA membership in 2011 as it became evident that its council is controlled by those very managing agents whom leaseholders want removing from their buildings”.

Omertà, the Sicilian vow of silence, has been a part of ARMA’s unwritten code for far too long.

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ARMA-Q: an ethical facelift for a flawed trade body

September 21, 2012 by

Next month the Association of Residential Managing Agents unveils its new ethical facelift ARMA-Q – having never, in its 21-year history, publicly expelled a single member. (See ARMA’s draft announcement pdf at the bottom of this article.)

There is to be a 10-point “consumer charter” to reassure leaseholders and an apparently independent regulatory chairman, assisted by a panel of perhaps 12 industry and lay members, who will accredit the 270 existing ARMA members and vet ones that apply to join.

In addition, the regulator will rule on disciplinary issues, imposing fines and costs and, ultimately, expelling offenders from the organization. It is not clear at this stage whether this process will be public, which would be the only means of making it effective.

At present, complaints about an ARMA member are addressed internally by the company concerned and then go on to whichever Ombudsman scheme the firm has signed up to. These rulings are not made public, and the cash settlements are trifling. They cannot be compared to the redress achievable in the civil courts, or LVTs.

ARMA-Q is stressing the independence of the regulator, who will nonetheless be appointed and paid for by the governing council of the trade body. The appointment will not be from within the sector but a “person of established professional standing preferably, but not essentially, with a strong public profile”. An “overwhelming 200 plus applications were received” after the job was advertised in the Sunday Times in June. [Read more...]

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ARMA-Q must expose managing agents’ ‘financial interests’

September 21, 2012 by

Robert Plumb
, chief executive of managing agents HML Holdings, which is accredited to LKP and is a member ARMA, considers ARMA-Q and the complexity of transparency for residential managing agents

Growing leaseholder empowerment and awareness combined with the immediacy of communications will inevitably mean that managing agents will require a thorough understanding of what it means to be truly transparent.  In leasehold there are many complex permutations of the relationship between landlords, their managing agents and their leaseholders. It is, of course, the leaseholders who actually pay the bills, but often landlords who take the decisions. Given the historically poor level of transparency and the variety and complexity of leasehold structures there is significant scope for misunderstanding. In fact put more harshly there is significant opportunity for a lack of transparency and the use of “smoke and mirrors”.

An understandable and fundamental principle that we should anticipate is that in the minds of leaseholders they should be able to trust the impartiality of their managing agent.  They would like to believe that the agent (whose fees they pay) will act in their best interests when deciding which supplier or contractor to use for their building.  In relying on their managing agent to select the best value for money supplier (and best of course is not always cheapest) they would naturally want the agent not to be compromised by the agents own financial interest in the transaction or in the supplier. One can’t help observing that the downward pressure on property managers’ fees that occurs in difficult economic times, such as we have had recently, has had the effect of keeping base management fees artificially low. This may well have contributed to agents having to look at other ways of making money in order to survive. It is these additional income streams in particular that require additional transparency.

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