May 29, 2017

Should ARMA replace the ARHM?

Please follow and like us:

This question is prompted by yesterday’s annual conference of ARMA – the Association of Residential Managing Agents.

It has begun the process of self-purification by introducing a tough regulatory scheme called ARMA-Q, which comes into force in January 2015.

Its core message is this:

ARMA-Q

“Its aim is to protect consumers and deliver a recognised advantage to our members, through professional self-regulation that guarantees probity, the highest levels of ethics and best practice in all dealings between residential managing agents, intermediaries, landlords and leaseholders.”

Former Labour housing minister Keith Hill is the ARMA-Q regulator and the scheme is more substantial than PR window-dressing (although, one suspects, this was the original hope).

Yes, we have plenty of reason to be wary of property managers cleaning themselves up. But Michelle Banks, a former DCLG civil servant, and Keith Hill know that statutory regulation of block management is inevitable.

LKP, Carlex and ARMA all agree that it is absurd that anyone – even a convicted fraudster – can set up as a managing agent and hold thousands of pounds of other people’s money “in trust” without any checks or balances whatsoever.

Short-term tenants are far better protected.

On the other hand, many repeat offenders in the leasehold game are – at present – members of ARMA, RICS and ARHM.

Yesterday’s meeting of ARMA is reported by Carlex’s associated organisation Leasehold Knowledge Partnership, and is repeated below.

But the question that needs to be asked on Carlex is: what is the point of the ARHM, the Association of Retirement Housing Managers?

It does not have a robust redress scheme and it is dominated by one overwhelming private supplier: Peverel, which manages 1,467 retirement sites across the country.

These were given to it by its former owners McCarthy and Stone, or the Tchenguiz Family Trust, which bought the Mc&S freeholds (they number the freeholds of 53,000 retirement flats).

Some of the very worst behaviour among property managers and freeholders has been seen in the retirement sector.

It is all the more repellent because the cheating – amply reported in the courts, and currently being investigated by the OFT – has involved the vulnerable.

And what has ARHM had to say about this over the years? Absolutely nothing.

It perpetuates the fantasy that all is well in the retirement leasehold community.

Carlex has yet to encounter a single leaseholder in a retirement site who has a good word to say about the organisation.

Would not the interests of retirement leaseholders be better served under the umbrella of ARMA, and its serious redress scheme ARMA-Q?

 

ARMA-Q reformers get strong backing at annual conference

ARMAMichelleBanks

The reform-minded leadership of Association of Residential Managing Agents today made a strong call for backing of ARMA-Q, its scheme to add ethically enhanced backbone to the professional body representing block managing agents.

An audience of around 300 members at Queen Elizabeth Conference Hall in Westminster was told that that ARMA-Q was a necessary first step to “inevitable” statutory regulation.

The Leasehold Knowledge Partnership was twice referred to in the opening addresses by association CEO Michelle Banks (above), who discretely did not name her organisation’s “fierce critic”, and by the ARMA-Q regulator, former Labour housing minister Keith Hill, who was not so reticent.

“Even LKP is supporting ARMA-Q,” Hill (below) announced, and quoted LKP’s view that his appointment was “a very good choice”.

Sir Peter Bottomley, the Conservative MP for Worthing West, who is driving leasehold issues up the political agenda, was in the audience.

ARMAKeithHIllMichelle Banks strongly urged the necessity of ARMA-Q, which after a protracted and complex lead-in period will become an obligatory condition of membership.

All the association’s members should have signed up by January 2015, although there will be a further year’s period of grace for those companies that have genuine grounds for not meeting the criteria. (Examples given are that not all properties have a valid management agreement or “there may be a need to alter business processes significantly”. LKP will explore this point at a later date.)

And for the first time association members were told what membership of ARMA-Q is going to cost: starting at £150 for firms managing fewer than 500 units to £10,000 for those with more than 100,000 units.

There will also be a three-year audit for ARMA-Q members, costing £914 for companies with less than 500 units to £6,150 for companies with more than 100,000 units.

ARMA-Q is a weighty, considered piece of work rather than PR window-dressing, but the open question is how its esteemable aims are going to be received by the existing membership.

 

Whatever doubts there may be were expressed at the private AGM the day before, but the costs of the scheme could be a real hurdle. And can some ARMA members meet the criteria of ARMA-Q and survive?

One is not thinking only of some of the association’s insalubrious smaller outfits that have joined during  recent recruiting drives (membership is just above 300).

There are large corporates whose established modus operandi will not stand up to scrutiny if ARMA-Q is serious.

The proponents of ARMA-Q are gambling that these companies will have to up their game, or walk out into oblivion.

And behind all this is the assumption that ARMA-Q leads on to statutory regulation.

Is there wriggle room for moral compromise and fudging?

Almost certainly, people being people. But in response to LKP’s challenge of whether ARMA-Q has teeth, Michelle Banks and Keith Hill could not have been more bullish.

Comments

  1. Michael Epstein says:

    It all sounds very worthy! Just one question. Why no leaseholder involvement?

  2. Michael Epstein says:

    Keep up Carlex! You say Peverel manage 1467 developments. But that was before the latest setback to afflict them.
    I note time is to be given for associate members to comply with ARMA-Q. It is of interest that this is not just to improve service levels, but as has been pointed out there are examples of companies not having a valid managing contract.
    So at a minimum we would be looking at 2016 for ARMA-Q to have any real effect.
    Since, membership is not compulsory in order to carry on as a property management company, what sanction would it really be to be expelled?
    Indeed, it should be asked if a property management company is so large that expulsion would lead to the financial collapse of ARMA itself, what sanctions would ARMA take?
    Even under present guidelines, how can a company that has admitted to price fixing retain their membership of ARMA?

    • Er … the “latest setback” you refer to, we reported on November 4. This article’s October 11.

  3. Michael Epstein says:

    Carlex,
    Good point!
    How though can i give my apologies without mentioning the setback of Mcarthy and Stone ending Peverel’s managing contract for 25 developments? After all it was my mistake with the dates of the article
    It would be unfair to add to the burdens of Peverel by yet again mentioning the loss of 25 Mcarthy and Stone developments.
    How unfortunate it would be if as a result of my error those residents at Mcarthy and Stone developments still managed by Peverel asked “If Mcarthy and Stone don’t want Peverel, why should we want them?”.

  4. Michael,
    Shame on you to burden us with the news of McCarthy and Stone, ending the management contracts of 25 Peverel Developments.
    Next you will be telling us that you do not care for Peverel Retirement?