August 11, 2022

OFT leasehold management inquiry now INCLUDES housing associations

OFTleaseholdmanagementThe Office of Fair Trading today announced its leasehold management inquiry and will include housing association and council leaseholders. The scope is defined here

This was a key point urged by Campaign against retirement leasehold exploitation and, largely on its  prompting, more than 100 leaseholders wrote to the OFT demanding their inclusion.

In a break from the OFT’s habitual glacial pace, the OFT leasehold management inquiry, which will be taken over by the new Competition and Markets Authority, anticipates reporting in September.

The key issues to be examined are:

• leaseholders’ perceptions of value for money and the quality of services they receive;

• whether leaseholders have sufficient understanding of their rights and obligations with regard to the management of property;

• whether leaseholders have sufficient influence on decisions taken by freeholders in relation to the appointment of property managers;

• whether property managers and freeholders have the same interests as leaseholders in areas such as costs of maintenance work and/or buildings’ insurance and how such decisions are made;

• whether property managers’ and freeholders’ choice of contractors and services may be influenced by any links with associated companies and the availability of commissions;

• how leaseholders’ rights to self-management work in practice; for example, whether there are difficulties in co-ordinating leaseholders to work collaboratively, whether self-management gives good outcomes, and whether any problems may be more marked in some areas, such as for retirement properties;

• ‘switching levels’ and more generally whether competition between property managers is working well

• the current and proposed redress and complaint schemes available to leaseholders and any problems with those schemes, including the standard of customer service.

The OFT / CMA’s leasehold management inquiry could result in recommendations and enforcement action against businesses breaching competition or consumer law, and recommendations of regulatory changes to government.

It is essential that leaseholders make the best possible case for reform, and avoid intemperate or ill-directed submissions.

The “industry” will be operating a peak PR efficiency: its trade bodies will be blaming leaseholder ignorance of their communal obligations; trumpeting tokenistic (and tardy) redress schemes that aim to keep abuses out of the courts while piously incanting “transparency”.

Leaseholders must make substantiated statements, including court references if possible, showing how the leasehold “market” is flawed.

LKP / Campaign against retirement leasehold exploitation will shortly give guidance on how to make these submissions as persuasive as possible to the OFT leasehold management inquiry.

Comments

  1. I find the fact that the OFT has widened the Scope of the Survey very daunting?

    They have shown that they do not have recourses to undertake a major investigation when the opportunity arose?

    As they are changing their priorities in April 2014 does it matter?

    • Chas,

      We are aware the resources allocated to this market review will be sufficient to the job. Remember this is not like the previous investigations where they had to find fault. This is a review of how effectively the market is working with no need to prove anyone has done something wrong. If the evidence shows the market is not working well they then make recommendations to government on the changes needed so it will work well. That includes the ability to recommend small or major changes to legislation.

      The change to the CMA in April is also very helpful. It means the report produced from this review is one of the first to be handled in a single process. In the past the results and an OFT review would then be passed to the Competition Commission for them to make recommendations which would add another year.

  2. Many will have missed the decision in Morshead v Di Marco It means that the statutory right to obtain a summary of costs and inspect the invoices has been undermined but the Court of Appeal. In effect you can no longer ask the Court to issue an injunction to require the landlord to do either.Your only remedy to the non compliance is a private prosecution in the magistrates Court but that means a fine of £2500 and no right to get the accounts or invoices.

    And if course if you are a council tenant, the Council cannot be prosecuted!
    http://www.lease-advice.org/news/story/?item=171

  3. It seems the OFT is being closed down and consumer matters will be taken over by CMA from 1st April 2014. Does this mean the the leasehold management enquiry is still ongoing or lost in the budget cuts ?

    http://www.oft.gov.uk/news-and-updates/cma/

    • Campaign against retirement leasehold exploitation says

      This is mentioned in the article. The inquiry continues within the CMA.