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From 1 October 2014, anyone who is engaged in property management work is legally required to belong to one of the following 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 help weed out the minority of bad managers and help drive up standards.
Is the management of my building covered by this?
There are some exemptions from these rules which include:
- Landlords – not explicitly excluded but are not generally covered by the definitions as they are not acting on instructions from someone else
- Local authorities
- Right to Manage companies
- Those authorised/licenced to carry out regulated activities under the Legal Services Act 2007
What should I do if I have a complaint about a property manager?
You should first follow your property manager’s internal complaints procedure but if you are not satisfied with the outcome, you can refer your complaint to whichever approved scheme your property manager belongs to. Details of how to do this can be found on the scheme websites.
What happens if my complaint is successful?
If a complaint is made against a scheme member and is upheld, then there are a number of actions that could be taken by the redress scheme provider:
- Require the member to apologise
- Issue a reprimand
- Order compensation – the amounts payable are capped at £25,000. If you wish to claim more you would need to apply to the courts; rather than the redress scheme.
- Fine a member
- Expel a member – If a member is expelled then it is likely they would be refused access to membership of another scheme. If no scheme will accept them into membership they could not then legally operate.
Members of a redress scheme are bound by the scheme decision but if you are unhappy with the decision you don’t have to accept it. You can go to court instead.
What happens if a property manager has not joined a scheme?
Local authorities have a duty to enforce the Order and can impose a fine of up to £5,000 where a lettings agent or property manager who should have joined a scheme has not done so.
- The local authority must give written notice of their intention, setting out information that includes the amount of the penalty.
- The written notice must be served within 6 months of the date on which the authority is in a position to issue the fine.
- After the 28 days have passed, the local authority must decide whether to impose the fine, with or without modifications.
- If they decide to go ahead with a fine, they must serve a final notice which must include certain information, such as reason for the fine and the amount to be paid.
- If the property manager wants to appeal against the final notice, an application to the First-tier Tribunal (Property Chamber) (Tribunal) should be made within 28 days of the day on which the final notice was sent.
- The Tribunal has the power to quash, confirm or change the final notice.
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.