Leasehold: Conveyancers want unfair fees and dodgy services ended

The Conveyancing Association has made a wide-ranging response to the government’s call for evidence on the regulation of letting and managing agents to better protect and empower tenants and leaseholders.

It says it wants the government to address a number of problems regarding property management and leaseholders, including:

- what it calls “the unreasonable fees charged by Lease Administrators”;

- duplication of charging;

- the ‘invention’ of additional services purely to generate extra revenue; and

- significant delays in the provision of services by the Lease Administrator.

To resolve the issues the CA wants:

- legislation determining reasonable fees charged with a limit on the services so that new ones are not simply invented “as is currently the case.” It says menu of charges should be set by the Secretary of State and reviewed biennially in line with the retail price index;

- administrative services should be delivered within five working days of receipt of payment or the fee should be refunded;

- any Lease Administrator charging another party to provide services should be required to be registered with a fit for purpose redress scheme and the schemes should include the provision of services in both letting and property management, and should be funded by a per complaint payment – whether or not the complaint is upheld;

- more resources for Trading Standards Offices in order to take enforce the current regulation effectively and to take action against what the CA calls “rogue landlords and agents.” It also wants to see a licensing scheme for all managing agents put into place in order to ensure they act professionally and efficiently;

- the regulation of any Lease Administrator undertaking charged-for services, or has access to client money or property. It believes this must include Management Companies as well as Property Managers, Landlords, Freeholders, Estate Rent Charge Owners, Right to Manage Management Companies, Tenant Associations and Commonhold Associations given that reserve funds within these schemes can grow to many thousands of pounds and need to be protected;

- it also wants to see the introduction of a fit and proper person test and qualifications/training depending upon the role undertaken. Anyone with access to client money should be aware of the rules and protection of client funds, and anyone with access to client property should be Criminal Records Board-checked and aware of the relevant liabilities and obligations of a party to a Lease or Tenancy Agreement. The CA also argues that professional indemnity insurance should be a requirement.

“Regulation seems to be the only way of achieving solid consumer protection in a scenario where the payer of the service is not the contracting party for the service. The fact that the industry, including the managing agents, have been calling for regulation themselves is compelling and we believe now is certainly the time for action to be taken” explains Beth Rudolf, director of delivery at the Conveyancing Association.

“Creating solid, legislative consumer protection means introducing, for example, a tariff of lease administration fees – we believe this would immediately reduce complaints and problems, and would actually provide fairness to Lease Administrators themselves” she adds.

“Leasehold has been one of, if not the, defining issue for the housing market in 2017 and this consultation provides us with the opportunity to change it for the better.  There are a large number of vested interests in this sector who would very much like to maintain the status quo; it is therefore incumbent on everyone to back these proposals and to ensure that the government is able to deliver real change in this area and create a positive experience for all stakeholders.”