The Office of Fair Trading (OFT) is proposing to launch a market study into residential property management services (such as maintenance, cleaning or building work) for leasehold homes in England and Wales.
Before such a study, the OFT wants to hear from interested people and businesses about the priority areas of concern that may be preventing this market from working well for consumers. The OFT is seeking views about the scope of the proposed study from anyone who uses or provides residential management services, including trade associations, property managers, consumer groups and individuals.
Property management is the operation, control and oversight of a shared property, including the provision of maintenance, cleaning or building work. Property management companies may provide the services themselves or through contractors. Residents typically pay via a service charge and may also pay regular installments into a ‘sinking fund’ to cover other significant expenses, such as roof maintenance.
The OFT is particularly interested in:
- Whether leaseholders feel that they have sufficient involvement in decisions taken about appointing managing agents, and if it is difficult to establish whether the property manager is providing value for money or a sufficient standard of service.
- Whether property managers and freeholders have the same interests as leaseholders in, for example, keeping down costs of maintenance work or buildings insurance.
- Whether there is effective competition, including evidence about how easy it is to switch between providers.
- Whether residents receive good value for money and reasonable quality of service.
- The time, effort and resources required to complain and seek redress.
- An important part of the property management market concerns the management of retirement properties. The OFT is particularly concerned to examine whether residents of such properties, some of whom may be in a particularly vulnerable position, are getting a fair deal.
Cavendish Elithorn, the OFT’s executive director, said: “This market is significant, with as many as five million people living in leasehold properties. Costs can be very substantial and we have been provided with a number of examples showing significant financial impact on individual residents and the difficulty in exerting control over the process.
“However, before formally launching our study we want to hear from key players and interested parties in this sector, as well as from the residents themselves, so we get a clear idea of the areas on which we should be focusing.”