Consumer groups call for statutory regulation of a sector beset with scandals
LKP has declined an invitation by RICS and the Property Ombudsman to take part in a consultation for a non-statutory code of conduct that has largely already been written.
So has the Federation of Private Residents Associations (FPRA), which described the process as “spurious”.
Their decision has been warmly applauded by the National Leasehold Campaign, which is also giving the sector’s consultation a miss. “Trust from leaseholders has been lost,” it says.
The formation of the group on July 1 is reported here:
No consumer organisation is involved in the steering group, which deals with estate and letting agents as well as block managing agents, and is headed by Labour peer Dianne Hayter.
“This looks to me like an attempt to pre-empt Government regulation,” says veteran leasehold campaigner Shula Rich, vice-chair of the FPRA, who has also run the Brighton and Hove District Leaseholders Association for many years.
“A trade body cannot regulate itself. The previous code was developed at the request of Government and submitted by RICS twice before it was accepted under the 1996 Act.
“I was on the previous working party to develop the third version of the code. Leaseholders are the partners in regulation not fig leaves. We should certainly not be part of this spurious exercise.’’
Leasehold groups are understood to have snubbed opportunities to respond to a consultation on the development of a new code of conduct for property sector. The Code of Practice Steering Group, chaired by Baroness Hayter, launched a consultation on the rules in July as part of the implementation of Lord Best’s Regulation of Property Agents (ROPA) recommendations made last year.
In announcing the process on July 1, RICS declared: “As part of a combined drive by Government and those working within residential property to make positive change for consumers …”
In fact, it is sector driven initiative with no government involvement at this stage. Furthermore, the code appeared to be ready in draft form a fortnight after the announcement was made.
LKP responded today:
“Thank you for the invitation, but the Leasehold Knowledge Partnership will not be participating in this initiative. We deprecate that this is a non-government initiative. Instead, the property trade bodies are attempting to present ready-formed codes of practice to government for rubber-stamping.
“We have seen with the unfailing failings of self-regulation in block management, whether of RICS or ARMA or ARHM (Association of Retirement Housing Managers), that it does not work.
“Here’s RICS disciplinary fiasco over Benjamin Mire and 300 others:
Here’s Sally Keeble walking out as ARMA’s regulator:
And here’s ARHM feeble response to the OFT finding of a bid-rigging racket by Peverel’s subsidiary Cirrus:
ARHM STATEMENT INTO PEVEREL PRICE FIXING / COLLUSION FOLLOWING INVESTIGATION BY FORMER OFT. Starts The ARHM Audit and Regulation Committee has been working with Peverel to review the outcome of the OFT investigation into collusive tendering in relation to the supply and installation of certain access and alarm systems to retirement properties.
“We need statutory regulation and protection of leaseholders funds, and it is not for the discredited trade bodies to control the agenda of how this is done.
“Your invitation arrived in the same week that the Competition and Markets Authority takes enforcement action against plc house builders, in yet another example – were it needed – that the monetisers in residential property cannot mark their own homework and that consumers need robust, statutory protections.”
NLC co-founder Katie Kendrick said:
“Trust from leaseholders has been lost. The sector cannot be trusted to regulate themselves following years of abuse and exploitative behaviours.
Those who have created this mess or have allowed it to continue cannot and should not be trusted to fix it … The only regulation that is acceptable at this point is that of statutory regulation. Nothing short of this is acceptable.”
Although the process appears semi-official and government-backed, it is in fact a sector-driven process.
An MHCLG official assured LKP: “The steering group is an initiative led by RICS and the Property Ombudsman and MHCLG has no control over the group’s work or membership. MHCLG is committed to improving the property agent sector, and ministers have expressed support for the sector being pro-active in this area, but we have made no commitment to endorse any code that this group might produce.”
“It is important to re-emphasise that whilst Government’s supports the project taking place, it is not in advance endorsing the end product, and we would want to take soundings and properly appraise any outputs before proceeding. There would also need to be a detailed consideration of the code alongside other recommendations made by the Lord Best RoPA Working Group to establish the framework needed for the sector.”
Here is the oven-ready draft code: