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Written by rosalind renshaw

The OFT is to launch a study into residential leasehold properties in England and Wales after complaints of rip-off charges and bad service by managing agents.

The study, to be launched early next year, will focus on property managers, service charges, sinking funds and insurance costs. The OFT is consulting on what specific areas the study should concentrate on.

Maintenance, cleaning and building issues will be part of the remit as the OFT tries to assess whether residents are getting value for money.

Many leasehold owners are elderly people living in retirement properties, and the OFT says it is concerned they could be particularly vulnerable.

The OFT wants to know in general whether leaseholders feel they have sufficient involvement in decisions taken about appointing managing agents.

It also wants to know whether property managers and freeholders have the same interests as leaseholders in keeping down costs of maintenance work or buildings insurance; whether it is easy to switch property managers; whether property managers give good value for money and quality of service; and whether residents feel they can complain and seek redress.

Letting agents, as distinct from leasehold management agents, will specifically not be covered by the scope of the study.

Cavendish Elithorn, OFT executive director, said: “As many as five million people live in leasehold properties.

“Costs can be very substantial and we have been provided with a number of examples showing significant financial impact on individual residents and the difficulty in exerting control over the process.

“However, before formally launching our study we want to hear from key players and interested parties in this sector, as well as from the residents themselves, so we get a clear idea of the areas on which we should be focusing.”

Trade association ARMA, which is introducing its own quality control system for members in early 2015, said it welcomed news of the study, but said that ultimately, statutory regulation is the key.

In February 2009, the OFT publish a study into the Scottish property management market, and found it was not working well for consumers in Scotland.

For further information, including on how to respond, visit the link below

https://www.oft.gov.uk/OFTwork/markets-work/residential-property-management/#.Up4amGRmUWU

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