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Agents will have to give more information when selling flats
Agents selling leasehold flats will have to give information about service charges and ground rent on property details.
The Competition and Markets Authority has made this one of its key recommendations after an eight-month study into the residential property management industry.
It said that prospective purchasers might not understand about leasehold, or what their obligations and service charge liabilities might be.
The study also has major implications for those agents which also run block management businesses.
The CMA’s report also says that property managers should set out clear plans for improving properties, justifying all their charges and disclosing their commissions.
They should also disclose any corporate relationships with contractors or landlords.
The CMA additionally proposes a new mediation service, so that leasehold owners do not have to go to court.
Another key recommendation is a change to the law, allowing flat owners to “vote out” poor property managers provided half of them agree.
The CMA report does, however, stop short of recommending regulation of the industry – despite finding that some property managers charge excessive fees and give poor service, and choose contractors on the basis of how much commission they will earn.
An estimated 5m people in England and Wales live in leasehold flats.
Unusually, the CMA issued an update into its study of the residential property management industry in August, when it said it had identified a number of causes for concern and called for more views.
In particular, it said that charges could be excessive or unnecessary, with insufficient clarity.
Its final report was published yesterday.
Trade body the Association of Residential Managing Agents said it welcomed the report.
Martin Perry, chairman of ARMA, said: “While we welcome the CMA’s acknowledgment that many property managers provide a good service to leaseholders, it is clear from their findings that there is room for improvement in the way the industry operates.
“ARMA is on the case. From next year, all our members will have to be accredited to ARMA-Q which enforces best practice.
“We want our ARMA logo to be the badge of excellence – the natural choice for consumers.
“We are ready to work with the CMA, government and other residential property interests, to achieve the improvements that are needed.”
http://www.propertyindustryeye.com/agents-will-give-information-selling-flats/
