“Why I won’t give up on regulation”

It is both a sadness and an irony that I find myself lobbying for more comprehensive regulation of managing agents in the residential property management sector. Businesses in the services sector do not necessarily welcome more regulation. But property management is different. In my view, property management needs the equivalent disciplines, accreditations and rules of those found for example, in the legal, medical or auditing professions. Property management has a similar combination of complexity and necessity for trust as these professions do. We property managers look after other people’s money with a responsibility not too dissimilar from those in the heavily regulated financial services sector.

Yet there is no legal authorisation required to operate as a property manager and no licence required to look after the communal funds of leaseholders.

Many property managers have had the experience of taking over the management of a block from another property manager whose fundamental understanding of the law and the disciplines of sound financial management have been questionable. Excellent progress has been made in recent years with codes of conduct (and training) from professional bodies and associations such as RICS and ARMA and the compliance that comes with their membership. Sadly, that membership is optional.

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I came across a good illustration recently. Whilst I would never wish to be demeaning to those who provide cleaning services, it disturbs me to hear of examples of block management being undertaken by “competitively priced” cleaning companies. In its simplest form, managing a block might seem as though it is the activity required to keep it clean. Addressing the obligations that come with the codes and disciplines of our profession (let alone the instances of filing company accounts or the Section 20 requirements of the Landlord and Tenant Act) might not seem that important when the management of a building is centred on keeping it (physically) clean.

Apart from demanding professional standards, the regulation of property managers would establish the disciplines of disclosure and transparency that other professional service providers are required to adhere to. Many property managers compliant with the requirements of our trade association, ARMA, are also familiar with taking over management instructions from managing agents who have not practiced judiciously the “independent decision making” that service charge payers can rightfully expect.

Regulation would also carry with it a more precise definition of educational standards.

Awareness should come more easily with the rapid communications of the internet age which should , increasingly, expose abusive practices.

My own belief is that such exposure of abusive practices will eventually bring about the regulation of service providers within our industry, at least to the level of other professions.