Key insights

As demonstrated by our redress map, the current redress system is complicated, and when seeking to address an issue, a leaseholder can find themselves presented with a “portfolio” of options, with no easy way to prioritise.

Consumers are not redress specialists and rarely have all the information in an accessible manner to make the best assessment of the type of redress they should pursue. There is a risk that this leads to leaseholders giving up and not escalating their complaints.

Evidence from the English Housing Survey showed that two-thirds (67%) of leaseholders who had complained about management of their property to their managing agent or landlord were not happy with the response they received. 78% of those dissatisfied leaseholders then chose not to escalate their complaint further.

Through our survey with leaseholders, we sought to understand why they may not escalate a complaint. The most common responses were that the process seemed too time-consuming and costly or too stressful.

Similarly, when asked to rank the most important considerations when escalating a property issue, the most important factors were either to do with the process (likelihood of action, guidance available) or financial implications (service charge impact, cost to me). In simple terms, most customers want to understand how likely it is their issue will be resolved and what it will cost them.

With this in mind, serious consideration should be given to ensuring that leaseholders have the information they need in an easily accessible format as early as possible to demystify the process and assure them that there is an understandable route to redress with clear potential outcomes.

As set out above, when leaseholders are unhappy with the management of their building, their first step is to complain to the provider directly before escalating their complaint to a government-mandated redress provider.

However, in practice, this is not always a straightforward path to navigate. Firstly, they need to satisfy the provider’s complaints process, all of which are different. They then need to know which ombudsman or redress scheme to contact; this depends on who their agent has chosen to sign up to. If their agent is not forthcoming with this information, they would need to identify the relevant redress organisation and review membership lists on its website.

Moreover, because of the lack of a single register listing all operating agents in the country, in practice, there will be occasions when an agent will not be signed up to a redress provider. In these circumstances, agents should be reported through Citizens Advice or National Trading Standards, but it does not help the leaseholder at the point when they need an issue resolved.

Upcoming reforms to further professionalise managing agents will be key, and considerable attention during implementation should be given to ensuring that all agents are signed up to a redress scheme, and that this information will be published in a way that is clearly available to leaseholders.

Customers’ problems are often multifaceted and do not necessarily fit within the jurisdiction of any one redress provider.

In the example above a redress provider has a narrower jurisdiction than a leaseholder would expect. While they can make rulings on whether an agent has provided poor service or breached their obligations, they often cannot make the high-impact decisions that would improve a leaseholder’s situation significantly (for example, deciding if service charges are payable, or directing the building owner to get repairs done).

This leads to a situation where leaseholders approach a redress organisation with the expectation that their issue will be resolved, only to be presented with another “portfolio” of options that dissect their complaint into what a redress organisation can and cannot help with.

Further support for leaseholders at the point when they make their complaints to unpick their various issues and improve their understanding of what organisations can and cannot help with would be helpful.

The courts and some professional bodies, such as the Law Society, the Association of Retirement Housing Managers (ARHM), The Property Institute (TPI) and the Royal Institution of Chartered Surveyors (RICS), encourage parties to explore ADR. Meanwhile, the Federation of Private Residents Associations (FPRA) is a long-established organisation representing long leaseholders in England and Wales and also recommends the use of ADR to resolve disputes.

Further, evidence suggests it can be effective. The First-tier Tribunal offers mediation ahead of accessing its hearings. Mediation at the tribunal is successful in 70% of cases and quicker than the tribunal process.

However, there is a lack of clear centralised advice and guidance on private options for ADR, and options vary across the country. Customers need more clarity on the specific professional legal services available to them in residential leasehold dispute scenarios, when these are worth exploring, what the costs are and what accreditations providers should have.

There are a number of organisations in the redress system providing multiple touch points for consumers.

Advice services such as LEASE provide an important role in directing consumers and advising them on their options, but the process is disjointed. We currently have a limited understanding of whether, when we refer a customer to another organisation, they follow through on that advice, and what their outcomes were. This limits our ability to understand the customer journey, or how effective certain referrals are, or the points at which consumers give up.

More effective join-up of data and information between organisations within the system could help create a more seamless consumer experience. Further work drawing on best practice from other sectors may be beneficial.