Regulation of the residential leasehold sector is largely welcomed by managing agents and, despite some real procedural and training adaptations that all ARMA members will need to undertake, the benefits far outweigh any additional time and cost and must result in better choice for consumers.
ARMA-Q is no half measure and represents a huge achievement on the part of those involved in what, I believe, will shape the future of leasehold management. As a member of both ARMA and RICS, Mainstay is required to adhere to the RICS Residential Management Code. This sets the standard for all managing agents that are members of either RICS, ARMA or both and has statutory approval. The ARMA-Q regulatory framework seeks to build on those standards, and give consumers confidence that their agents are transparent, competent and compliant and are prepared to be called to account by an independent panel. Independence is important because anything less would not have held the level of validity required and, just as importantly, the standards will be audited. This is not a box ticking exercise.
In most cases, regulation will simply mean changing processes that are not wholly transparent to make them clear to customers and clients alike. It will require published schedules of rates for all charges falling outside of the standard management fee, complete transparency with regards to related companies and will prohibit hidden or undeclared income streams.
ARMA-Q recognises that managers need to be flexible in their delivery and that innovation and creativity should not be stamped out by imperative rules. However, ARMA also knows that everyone in the industry needs to shape up and deliver excellence. Most of all, it needs to be done on a level playing field and consumers would be mad to use a property manager who was not accredited and regulated.
We have more accreditations than I would ever have imagined necessary. I strongly suspect however, that as far as our customers are concerned and, as far as future opportunities are concerned, ARMA-Q will quickly become a highly valuable signifier of quality.
Complexity in leasehold block management continues to increase; complex development and contradictory case law, wrapped up with myriad statutes and regulation make it increasingly risky for operators and increasingly opaque for leaseholders. Regulation will bring some much-needed standardisation and create
real barriers to those that chose to remain outside of good practice. I believe that there is increased awareness and sophistication among consumers and the need to provide genuinely expert and accredited services. In seeking to meet the standards set out in ARMA-Q we have looked closely at how our current process improvements can assist:
- commitment accounting is allowing us to report earlier and more accurately on budgeted expenditure in a year
- we understand there is a need for a proactive focus and real value for money
- we understand the role of quality services in asset enhancement
- we believe that long-term planning is required to deliver certainty in complex buildings
- we aim to be one of the first fully accredited and independently regulated managing agents during 2013-14.
Our team is actively involved in seeking improvements and innovative ways of delivering the best services. My belief is that accreditations and regulation encourage a collaborative team approach and this successfully wins new business. ARMA-Q accreditation will add further to my conviction that, in future, only the very
best will succeed in an industry long overdue a regulatory framework.
This article was published in the RICS Journal June 2013
