Managing Agents are not regulated by the Government and any organisations purporting to be a Regulator of Managing Agents is simply a Trade Body which is optional to join. The most common of these being The Association of Residential Managing Agents (ARMA).
We originally joined ARMA on 30th July 2009, our reasons for joining ARMA at the time was to share experiences and updates with fellow professionals within the industry and increase our education in the industry sector. On 18th May 2015, Red Brick Management took the decision to resign as a member of ARMA. This is due to a shift in focus of the organisation from a Trade Body to a Self Regulatory Body.
Red Brick Management Limited prides itself on having a completely clean record with ARMA during our near 6 year stretch as an ARMA Member, our interaction is summarised:-
Complaints / Referrals to ARMA – Zero
Complaints / Referrals to Ombudsman Schemes – Zero
Complaints / Referrals to Regulator – Zero
Number of Visits to our office by ARMA – Zero
Number of Visits to our developments by ARMA – Zero
ARMA introduced “Self Regulation” as a reaction to the Conservative and Liberal Democrat Coalition Government ruling out Regulation of Managing Agents for the 2010-2015 Parliament. In times of austerity in our opinion it is more likely the Government will not regulate managing agents and if they did it will be after the Parliament starting in 2020.
To date there is only one code that is recognised in Government Legislation, this is the RICS Service Charge Residential Management Code which is approved by the Secretary of State for England under Section 87 of the Leasehold Reform, Housing and Urban Development Act 1993.
It has to be remembered that Residential Property Management is quite a diverse field with examples below:-
Residents Management Companies
Retirement Flats / Sheltered Housing
Right to Manage Companies
Resident owed Freeholds.
We do not think the solution is to Regulate or “Self-Regulate” the whole sector instead we support targeted responses to different sectors in which problems occur and a simple licensing system.
In our opinion this is to create a barrier to entry into the market against the competition rather than the protection of Leaseholders.
Managing Agents with good long histories and or vast portfolios of clients have left self Regulation Schemes whilst other agents that have previously been subject to bad publicity have been allowed to join.
Other Managing Agents that have been newly formed which have qualified members of staff from the IRPM or RICS have been prevented from joining as they have not been trading for 2 years.
Ultimately, only if the vast majority of Managing Agents join self regulation schemes will such a schemes be successful.
No, our client base is a mix of Residents Management Companies, Right to Manage Companies and developments in which the Freehold was purchased by the residents. We do not work for Commercial Freeholders and do not work in the Retirement Sector.
Our clients are not on long term contracts and are free to move to alternative Managing Agent on notice periods of typically 1-3 months.
In our opinion our client base has residents or an alternative stakeholder making a decision and we do not see it fit for a Regulator who is not approved by our client interfering with our client’s decisions.
Not in its current form. Our reasons are:-
The vast majority of managing agents would need to join.
Different codes drawn up for different sectors of the industry rather than the current cache all approach.
Barriers of entry to the scheme would need to be relaxed to encourage more participants into Self Regulation.
Current Schemes have no sanction over Qualifications of Staff who work in the Property Management Industry. Another example of Self Regulation is the General Medical Council, who have the power to strip Qualifications from Doctors or Nurses rather than simply sanction the actual Doctors Surgery or Hospital.
In our opinion this will offer limited protection once a complaints procedure or a First Tier Tribunal or Ombudsman Scheme has been completed.
If the Regulator was to penalise a Managing Agent, ultimately the Managing Agent could leave the Self Regulatory Scheme which may result in other agents leaving due to the threat of fines.
At Red Brick, we have invested heavily in training and qualifying our staff, there is actually no provision for Training and Qualification in Self Regulatory Schemes.
The increase in back office administration and processes carried out by a Managing Agent will have two consequences being either an increase in Management Fees or a cut in front line Property Management Services provided.
We doubt this will be on any Political Parties Agenda to long after the end of the 2020 Parliament.
Ahead of Regulating Managing Agents we would assume that there will be a number of large legislation changes effecting the sector.
The Competition & Marketing Authority market study dated 01/08/2014 states:-
“New unified code of conduct
5. There are a number of relevant codes of conduct that property managers may comply with. While we understand that the ARMA and RICS codes cover a good proportion of the market, including most of the large suppliers of RPMS, their coverage does not extend across all businesses that may be operating as a property manager. As such, we took the view that the prospects for designing a new unified code of conduct for the industry could not be achieved working through either of these bodies, either alone or working together. There may though be merit in aligning as far as practicable given their different coverage the various relevant codes of conduct and self-regulation schemes so as to provide clarity both to leaseholders and property managers on expected conduct “
We would therefore assume a new third code would be drawn up.
Firstly, we feel it is important to break the industry down into Sub Sections and then consider these individually:-
Retirement Housing Sector – Usually the residents are locked into having Property Management Services supplied by one provider and the ability to change Managing Agent is limited. This area we believe should be Regulated by Government Legislation as this area of the Residential Property Management Industry receives a overwhelming percentage of bad publicity and complaints. Red Brick does not operate in Retirement Housing Sector.
Commercial Freeholder Controlled Managements – We believe that these should be regulated by Government Legislation. The reason for this is ultimately the end payer of the service has very little say on how the Service Charges are calculated. Again, this area of the Residential Property Management Industry Receives a large percentage of bad publicity and complaints. This is an area of the industry Red Brick do not operate within.
Resident owed Freehold Companies – The Residents have the right to replace a poor performing managing and negotiate contracts as they see fit and we can see no case for Regulation.
Right to Manage Companies (RTM’s) – An RTM occurs when the Leaseholders have grouped together previously to form a Company of self control, we feel that the Directors of a Right to Manage Company are quite capable of analysing the market to find the best replacement for the Commercial Freeholders appointed Manager, and have sufficient power to move to alternative supplier. We can not see the need to regulate this sector of the market.
Residents Management Companies – The Residents have the right to replace a poor performing managing, can stand as a Director and make there own decisions. We can see no case for regulation.
In summary we are in favour of targeted Statutory Regulation but think that different areas of Residential Management need to be looked at differently.
We are in favour of Government Licensing of Residential Managing Agents.
If a cache all system was to be used this is what we would propose:-
Sectors of the market experience problems such as Retirement Housing or Commercial Freehold Managers then these individual areas could become Regulated.
We hold £1 Million of Professional Indemnity Insurance cover, this level of cover is a stipulation for being FCA Regulated. A copy of our Certificate of Insurance can be provided upon request.
The Company was incorporated in December 1998 and is now known as Red Brick Management Limited which is registered in England under company number 03678444. The trading name of the company is Red Brick Management. The principals in the company have combined property experience spanning in excess of 40 years.
The Board of Directors are Ian Harvey and Lucie Williams, with Keith Hughes being appointed as an Associate Director.
We have 11 full time members of staff engaged solely on Property Management activities.
We make no secret of the fact that our organisation is well run, profitable, and free from borrowing such as bank loans and overdrafts. Our accounts are filed and available for inspection at Companies House. Further information may be provided upon request.
Our company is registered for VAT and therefore VAT is payable on our fees.
Our VAT Registration Number is 971 6568 80.
Yes. All public and private organisations are legally obliged to protect any personal information they hold and we confirm that we are registered under The Data Protection Act.
Our Data Protection Registration Number Z1768322
Further information on the Data Protection Act may be found by following this link www.ico.gov.uk/ to the Information Commissioner’s Office.
QUBE Property Management Software is the backbone of our client property management, accounting and administration software.
QUBE are a specialist in providing property management and accounting solutions. Established in 1978 (formerly Estate Computer Systems).
Information on QUBE may be found by following this link http://www.qubeglobal.com/solutions/ to their website.
We have a comprehensive list of Preferred Contractors, independent of our organisation, who are capable of undertaking a wide spectrum of works, both small and large. We operate a robust purchase order system which ensures both quality and financial control of all works undertaken
We do not charge any additional fee for the tendering process on contractor selection for ‘day to day’ works or services. However, in line with industry practice we usually charge a fee when instructed to act as project manager for major works and/or when instructed to undertake any associated legal (administration) aspects, the cost of any such additional services being pre-agreed. A pre agreed fee may apply.
The majority of our contractors have worked for our clients for many years however we are always looking to add to our client contractor panel by bringing on board further contractors of proven ability and financial probity, able to comply with requisite Public Liability Insurance and Health & Safety criteria.
We operate a Client Money Manager system with HSBC Bank, all client funds are kept in sub accounts opened via HSBC.
We have robust processes in place for the issue of service/maintenance charge demands, and the recovery of monies payable from defaulters. In common with our clients we take the view that it is simply unfair that any one payee discharging his/her/their obligations in a timely fashion should have to subsidise another who does not. A process of incremental reminders and chasers, possibly leading to recovery action in some instances, has resulted in our first class record of service/maintenance charge recovery.
You can pay by cheque, internet banking or subject to client approval, by Standing Order. Details are included with service/maintenance charge demands.
Red Brick Management Limited is committed to minimising the impact of its activities on the environment.
The key points of its strategy to achieve this are: