Qualifications/acceptable membership criteria for a prospective Management Agent

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    Qualifications/acceptable membership criteria for a prospective Management Agent

    Hi, we are an existing RTM of two years in block of 8 leasehold flats. I’m one of 5 directors. When we first set it up, we followed advice of leasehold advisory bureau and specifically sought an ARMA member agent. We are currently in process of investigating change of agent. One of the prospective agents is not a member of ARMA, but is a member of the Property Ombudsman Scheme, so this has led me to think that perhaps we don’t ALWAYS have to use someone with ARMA membership and that there are other equally acceptable memberships out there that will give us, as RTM, the same confidence that the code of conducts, service charge money and professional indemnity insurances are being followed/in place. My question is, what memberships, other than the lease advisory recommended ARMA membership, can we also look out for? Is property ombudsman membership or Property Redress Scheme equally good membership for example? Many Thanks


    #2
    PRS/TPOS are nothing more than redress schemes, so someone to complain to if things go wrong but they don't set any standards or codes of conduct. A smaller agent should be members of Propertymark, who do set basic standards and provide client money insurance too.

    Really, any decent agent should be ARMA registered, it's usually the larger, national type agents who are members that offer relatively poor service compared against local/regional member agents.
    <a href="http://www.manchesterpropertygroup.co.uk/" target="_blank">Manchester letting agents</a>

    Comment


      #3
      RICS too. The trouble with Managing Agents is that they can belong to whatever organisation you like but quite often the work is handed down to relatively inexperienced juniors whose knowlege and experience leave a lot to be desired. We were using until recently a local one man band managing agent on an Estate on the South Coast who had carried out the work for years, had a good rapport with all of the lessees and knew every inch of the development like the back of your hand. His company was so small that he did the handyman work himself. Dont count on an ARMA agent meeting your expectations. Seek personal recommendations in the locality. You can join ARMA as an RTM company and access some of their publications etc. There is a lot of competency outside ARMA.

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        #4
        Membership of a trade organisation does not guarantee that the agent will provide a good service. Your best options are to search for Tribunal decisions which involve the agent and to ask the agent to supply details of other blocks which it manages and contact leaseholders in those blocks.

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          #5
          Thanks so much for your reply. It’s helped me to target my research further and I now understand much better the differences, I have learned through further research that all agents should be 1) members of redress scheme, as you highlighted https://www.gov.uk/government/public...edress-schemes and 2) signed up to one of these approved Client Money Protect schemes (CMP) https://www.gov.uk/client-money-prot...roperty-agents.

          I think what threw me is that members of Property Ombudsman Scheme (POS) are expected to prove certain conditions are met, namely that they have professional indemnity insurance and membership of prior mentioned CMP scheme https://www.tpos.co.uk/mem-compliance, both of which is also expected by ARMA, but I was getting confused by the use of the ‘codes of conduct’ term which POS and TPRS refer to as being needed to be adhered to as a conditions of their membership.

          I know ARMA members need to also comply with the RICS Service Charge Residential Management Code (https://www.lease-advice.org/news-it...ment-practice/). TPOS scheme members ALSO have to complete a questionnaire to demonstrate adherence to ‘codes of practice’
          https://www.tpos.co.uk/members/codes-guidance……however on further interrogation this is not the same as the codes of practice on government site.

          So I think I understand much better now what the different schemes and memberships mean. It sounds like ARMA provides certainty that its members are demonstrating and being audited/regulated for compliancy by RICS to the relevant code https://www.legislation.gov.uk/uksi/...0160518_en.pdf and that we need any agent to be able to prove this. I’ll also be looking to see if any of the agents employees are RICS members. Thanks so much again for your response.I feel far more equipped/informed now to ask the right questions of any prospective agent.

          Comment


            #6
            RICS has produced the "RICS Residential Management Code" for their surveyors, who manage blocks of residential leasehold flats. So you could appoint a management company headed by a chartered surveyor.

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              #7
              These memberships are really just a baseline. In practice they help little.

              Do your homework -- get loads of references from other clients, search tribunal judgements, and THINK. There are loads of crooks in this sector (despite these wonderful memberships - indeed a good example of some sort of quasi regulator(s) facilitating the crookery by giving an impression that this is an ethical regulated industry)

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                #8
                There are some very capable Estate Managers who are not members of ARMA. Personal recommendation is good. The trouble with larger firms is that they are apt to hand work to junior staff who lack experience

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                  #9
                  I suggest that you ask the agent for details of other blocks which it manages and contact leaseholders at those blocks. I agree with AndrewDod, check previous Tribunal decisions for any cases involving the agent. You will see from past Tribunal decisions that membership of a trade organisation counts for nothing.All agents are supposed to comply with the RICS code, it does not only apply to surveyors.

                  Comment


                    #10
                    Originally posted by flyingfreehold
                    Where do you get the idea that all agents are supposed to comply with the RICS code? That's a new one on me. We give valuations that are not Red Book for example
                    The RICS code has been authorised by the Secretary of State and summarises the legal requirements and good practice in one convenient place, As it states in the foreword, it has been prepared to promote desirable practices in respect of the management of residential leasehold property and it is intended to be read by landlords, leaseholders, managing agents, managers and occupiers of leasehold property.

                    It is a general reference point widely used at Tribunals and so yes, agents should comply with it. Whilst some parts are obligatory and others are optional, agents should comply with good practice and expect criticism if they do not.

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                      #11
                      I agree that agents should comply with good practice but for example the accounting rules for RICS firms are beyond what is necessary for the management of a house converted into two flats. The overheads of audited accounts for such management are a bit of a paperchase. Hence there are firms who are absolutely respectable but nevertheless dont strictly comply with all terms of the code.

                      Comment


                        #12
                        Originally posted by flyingfreehold View Post
                        I agree that agents should comply with good practice but for example the accounting rules for RICS firms are beyond what is necessary for the management of a house converted into two flats. The overheads of audited accounts for such management are a bit of a paperchase. Hence there are firms who are absolutely respectable but nevertheless dont strictly comply with all terms of the code.
                        I agree - but, unfortunately, tribunals will far too often treat the RICS code as full justification for expenses if the freeholder/managing agent is following the code.
                        They will, apparently, listen to arguments to justify reasons for not adhering to the supposed 'best practice' but, if a leaseholder and freeholder/M.A. disagree, I expect that they will almost always side with the one who wants the 'code' followed.

                        Having leasehold accounts signed off by accountants is of no benefit whatsoever to leaseholders in most smaller blocks, and can easily add a completely unnecessary 10% to annual service charge bills - but tribunals consider this to be a reasonable cost, even when the accounts contain costs that they agree should be reduced, or which aren't payable according to the terms of the lease.

                        Comment


                          #13
                          Originally posted by flyingfreehold View Post
                          I agree that agents should comply with good practice but for example the accounting rules for RICS firms are beyond what is necessary for the management of a house converted into two flats. The overheads of audited accounts for such management are a bit of a paperchase. Hence there are firms who are absolutely respectable but nevertheless dont strictly comply with all terms of the code.
                          The code at 7,13 does state that the "form of the examination (by an independent accountant) .... should be proportionate to the circumstances of the property"

                          Comment


                            #14
                            Originally posted by Macromia View Post

                            Having leasehold accounts signed off by accountants is of no benefit whatsoever to leaseholders in most smaller blocks, and can easily add a completely unnecessary 10% to annual service charge bills
                            An independent review of the accounts must be better than none at all, but I agree that the report is unsatisfactory and it does not mean that a leaseholder can rely on the accounts. The wording of the report indicates the extent to which the review is limited eg the bank balance is checked on one (the same) particular day of the year, so it can be incorrect for the other 364 days of the year.

                            Comment


                              #15
                              On smaller estates i make up a package of all of the invoices (quite often only one or two a year) and send it out by pdf. The overheads of an audit and set of accounts is absurd if the only item that year was the insurance premium. In many smaller estates where it is typically only an insurance premium to recover we dont even bother with a Managing Agents fee.

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