Regulation of Managing Agents - why we want it now!

At Mainstay we pride ourselves in acting fully in accordance with the myriad statute and regulation that goes with management of property in our sector. This does not always make us popular. We are ruthless in applying the rules, we are positively harsh in our application of the debt collection process and we remain committed at all times to following the letter of the law when it comes to health and safety matters and risk assessments.

For many years members of ARMA, including ourselves, have called for formal regulation of their industry but, whilst met with a good deal of sympathy, the Government department with responsibility for housing has chosen to avoid regulation, leaving the industry and ARMA to self regulate.

Of course this means that anyone can set up as a managing agent. You do not have to be a member of ARMA, you do not need previous experience and you might not choose to pay for PI insurance and you might even offer your services for £25 a unit.

In the current climate our ‘cottage industry’ has seen a raft of new players. Some of them are estate agents who are struggling in the current market, some are entrepreneurs who can see an opportunity in an area that has grown rapidly in the last ten years and others are former managers looking to go it alone.

We do not seek to discourage this but remain concerned that, as an industry, we hold some hundreds of millions of pounds on behalf of leaseholders and are responsible to freeholders or resident directors for the health and safety and quiet enjoyment of their schemes.

Ask yourself these questions when appointing a new agent:

• Are they members of ARMA? Our trade body is the only body in England and Wales to deal exclusively with matters relating to the management of residential and mixed estates and buildings.
• Will they undertake the fire risk assessments and other risk assessments required by law or by regulation?
• Will they hold your money in a separate account and in trust as required by statute?
• Do they have a credit control department and a proper procedure for collecting outstanding service charges?
• If they deal in any way with insurance matters are they regulated members of the FSA as they are required to be?
• Will they organise your Directors and Officers insurance and other specialist insurances?
• Do you have a named director, regional manager, manager and assistant for your development?
• Are they properly qualified to manage your block?
• Can you review accounts, insurance documents, lease details and budgets online at their website?
• Are all their contractors approved and correctly insured to work on your scheme?
• Do they have a track record and demonstrable expertise?

Until this industry is properly regulated there are plenty of rogues and plenty of poorly equipped and inexperienced players out there. Make sure your choice is driven by quality and comprehensive service and not simply by price and convenience.