A new lease of life: - CentreForum

A New Lease of LifeSelf-regulation has raised standards to some extent, but leavingmanaging agents to manage themselves unquestionably hassignificant flaws and does not look as if it will adequately balance theinterests of leaseholders, freeholders and managing agents. ARMAcannot reasonably be expected to offer a full regulatory servicebecause it was established as a trade association rather than aprofessional body – its priority remains representation of managingagents. Rather than seeing itself as an ideal industry regulator, theassociation has sought to fill some of the gaps created by successivegovernments’ inaction. There are clear conflicts of interests when atrade association seeks to perform regulatory functions for its ownmembers. ARMA recognises the need for independent regulationand in a recent review stated that their industry required:“an acknowledgement of interests which go beyondthe direct client. We have recommended that ARMAseparate regulation and representation with theregulatory role involving independent consumerrepresentatives.” 70If ARMA is going to have a separate, independent regulatoryfunction, it seems preferable to have a new, fully independentregulator rather than one funded by the existing association formanaging agents. The fact that ARMA recognises the need forseparate regulation should send a clear message to the government.Indeed, full regulation is supported not just by ARMA but alsoseemingly unanimously by other groups across the sectorincluding leaseholders, freeholders and lawyers. 71 ARMA supportsgovernment regulation, and its own regulatory function has arisenlargely because independent regulation has not been implementedby government. 72 Regulation needs an impartial balance and cannotwork if it is weighted to either managing practitioners or consumers.As a task force on the regulation of letting and managing agentsnoted, “A single independent regulator would be the ideal approach70 Baroness Hayter conducted an independent review for ARMA: www.arma.org.uk/doc/public/ARMA-Conference-2011PR.pdf.71 Based on authors’ interviews, and FOI minutes from task and finish meeting withCLG for leasehold managing agents in the private sector.72 An example of this is collaboration between ARMA, The Institute of CharteredAccountants in England & Wales and the Royal Institution of CharteredSurveyors (RICS) in defining Best practice for accounting for service charges.This is something that filled a perceived gap after the government opted not tointroduce new accounting regulations under the Commonhold and LeaseholdReform Act 2002.40