Appointment of a Manager and Compulsory Acquisition – The Twin Powers
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From 1 October 2014, anyone engaged in property management work in England became required by law to belong to one of three government-approved redress schemes. This requirement means that leaseholders and freeholders dealing with property managers will be able to complain to an independent body about the service they have received. Ultimately, the requirement for property managers to belong to a redress scheme will promote best practice, drive up standards and potentially see the demise of bad property managers.
The 3 government approved redress schemes are:
- The Property Ombudsman (TPO)
- Property Redress Scheme (PRS)
- Ombudsman Services: Property (Ombudsman Services)
Ombudsmen offer their services free of charge, and are thus accessible to individuals who may not be able to afford to pursue their complaints through the courts. The main purpose of the redress schemes is to settle or resolve complaints made by consumers against members in full and final settlement of that dispute.
Complaints that can be considered
Typical complaints accepted by the redress schemes in respect of unfair treatment by the member include, but are not limited to:
- Poor or incompetent service
- Rudeness or discourtesy
- Not explaining matters
- Not administering a transaction as efficiently as would be expected
- Avoidable delays
- Infringement of your legal rights
- Failure to follow the rules set for agents under any relevant Code of Practice and membership obligations
- An apparent breach of obligations
- Failure to follow proper procedures
Reasons why you would contact a redress scheme
You can use the service if:
- You are complaining about a property company listed on the redress scheme’s website
- You are complaining about a Chartered Surveyor and you are acting outside the course of your business, trade or profession unless your complaint is about the surveyor acting as an agent in which case any user of the surveyor’s service can make a complaint (subject to certain restrictions – see the redress scheme’s individual terms of reference)
- You are an actual or potential buyer or seller or a residential property who has a complaint about an estate agent that has provided, failed to provide, or is contracted to provide, a service to you
- You are an actual or potential buyer or seller of a residential property who has relied upon the services of an estate agent
- You have a complaint against a letting or a residential managing agent that has provided or is contracted to provide, a service to you or
- You are representing a customer who meets the above conditions.
Frequently Asked Questions
We have listed various indicative scenarios which include common issues that are raised by leaseholders who contact redress schemes. Each scenario is accompanied by a short podcast. Please note that this list is not exhaustive.
The managing agent is carrying out repairs to communal areas/exterior of the building – e.g. water ingress into a leasehold flat entering from the exterior of the property due to a defect in the structure of the building.
In this scenario, if there is an issue with the way in which the managing agent is dealing with the repairs then the redress scheme will be able to assist. However, if there are issues with regards to contributions towards the repairs, the schemes cannot determine the appropriateness of the amount but can comment if the managing agent has charged the correct amount as per the lease. The redress schemes are unable to deal with it if it involves chasing a debt from a leaseholder.
The standard of works undertaken to the communal areas/exterior of the building is not to a reasonable standard and as a result, the leaseholders are not satisfied with the contractors appointed by the Agent. There is also a delay in undertaking the works
If there is an issue with regards to the service charge payable as a result of the works not being to a reasonable standard, then the redress scheme will not be able to assist with this unless they receive evidence works are not to a reasonable standard, as they can direct the managing agent to resolve with the contractor. The redress scheme can assist where the property is not being managed correctly and as a result the works are then being delayed and not being carried out to a reasonable standard although, they are unable to ensure that works are carried out to a reasonable standard, they can consider the aggravation caused by the issue.
The leaseholder has some queries with regards to the buildings insurance but the managing agent is refusing to provide the information. The leaseholder also believes that the cost is too much and have requested a summary of accounts and further documents but this has not been provided by the Agent or the leaseholder has further queries on the accounts and is not satisfied with the answers received from the Agent
In this scenario, the Agent has a legal obligation to provide you with this information and you can make an application to the Magistrates Court, as it is a summary offence not to provide this information in accordance with the legislation. The redress schemes would not be able to enforce any decision/order from the Magistrates Court and would direct consumers back to the court. They will not be able to assist with the cost aspect of this complaint. They can investigate whether the agent is acting as required and then make a decision to ensure the agent provides the information it is statutorily required to provide. If they do not provide this information, sanctions can be applied such as expulsion from the scheme and the case can then go to the court.
The service charge has been increased by the Agent, and there are issues with regards to billing, along with a lack of the section 20 consultation process.
In this scenario, if there is a service charge dispute then the redress scheme cannot assist with this nor can they make a judgement as to whether the Agent has followed the correct consultation process regarding major expenditures. If, however, the Agent is not presenting their invoices in a clear and concise manner in accordance with the relevant codes of practice, then they will be able to assist in respect of that aspect of the complaint. They can assess whether an agent has followed the correct procedure, such as making charges as per the lease and provide direction if it has not been followed
Complaints that cannot be considered
There are times when, unfortunately, the redress scheme is not the correct forum for your issue. These include the following:
- The agent is not registered with a redress scheme
- Your complaint is being, or has been, dealt with by a court
- Your complaint is outside the redress scheme’s timescales*
- Your complaint happened before the agent was registered with a particular scheme
- Complaints that are considered to be malicious, frivolous or vexatious or
- Complaints that are already being dealt with by other complaints procedures
Where to go if a redress scheme is unable to deal with my complaint?
The Leasehold Advisory Service (LEASE)
LEASE is able to provide initial advice in relation to residential landlord and tenant law.
A court case can take months and even years to bring a dispute to an end. And the process can become very costly to both parties, adding to frustration and making relations even worse.
Mediation can be a swifter and less expensive way of sorting out issues. Private and confidential, it can bring to the table matters the parties may prefer to keep away from the courts.
Within an informal setting the parties can enter into a dialogue, exchanging views in a comfortable and less stressful environment. mediation services are available and further information can be found in the advice guide Alternative Dispute Resolution.
Early Neutral Evaluation
Briefly, the process involves an independent expert expressing an opinion on the merits of the issues raised by the parties. That assessment is based on a short statement from each party and limited documentary evidence submitted to the evaluator. The assessment is not binding but gives users an unbiased evaluation of the relative strengths of the parties’ cases, and a view on the outcome of the matter, should it proceed to tribunal, on the basis of what has been presented to the evaluator.
Tribunal or Court
It is possible that your issue can only be dealt with by the First-tier Tribunal (Property Chamber) or the Courts.
What to do if my managing agent is not registered with a redress scheme?
Local authorities have a duty to enforce the Order and can impose a fine of up to £5,000 where a letting agent or property manager who should have joined a scheme has not done so.
If a property manager fails to join one of the redress schemes after the imposition of a fine, the local authority can impose further penalties. There is no limit to the number of penalties that may be imposed on an individual lettings agent or property manager if they continue to fail to join a scheme.
The Enterprise and Regulatory Reform Act 2013 came into force on 1 October 2014, requiring all letting agents and property managers (England only) to register with an approved redress scheme.
The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc.) (England) Order 2014