On 22 March 2022 the Ombudsman published its latest spotlight report, examining landlords’ engagement with private freeholders and managing agents.
The report highlights a culture clash between regulated and unregulated parts of the housing sector, resulting in residents experiencing unfairness. Within the report, the Ombudsman sets out its expectations, commenting that landlords should ensure proper agreements are in place with managing agents and/or freeholders, that performance is monitored and failures addressed. The report encourages landlords to take a proactive approach to the landlord and tenant relationship and to take ownership for obtaining clear updates from managing agents and/or freeholders.
In creating the report, the Ombudsman looked at 62 cases across 37 landlords between November 2020 and December 2021. The maladministration rate over the period was found to be 64.5%, compared to 45% for cases of all types in the same period. 29.5% of the cases related to property condition. The second largest category was complaints handlings at 19.9%.
The report sets out 9 recommendations for landlords, which include the following:
- Landlords should ensure that they understand the level of risk they are exposed to in relation to fulfilling their obligations where they are reliant on managing agents or freeholders to act;
- Landlords should ensure their development and operational teams have a shared understanding of the challenges and risks associated with new homes. Any risks, compromises or restrictions must be communicated to staff and due diligence put in place;
- There should be clear service level agreements between landlords and managing agents and/or freeholders and landlords should review those agreements to clarify roles and responsibilities, avoiding confusion and delay;
- Landlords should review complaints received where the managing agent has been a contributory factor and identify areas of improvement. An action plan should be created and findings implemented;
- A review of operational responses should be carried out in relation to service or repair requests in buildings owned or managed by third parties;
- Processes for responding to service issues, particularly where multiple parties are involved, should include the development and use of clear action plans. Performance against those plans should be monitored and plans should be communicated to residents.
- Landlords should proactively pursue managing agents and/or freeholders for account information in relation to service charges. They should ensure that regular communication with residents is maintained with respect to the charges, delays in providing accounts and any method of calculation.
- Where standard form agreements are used, landlords should review them against responsibilities in buildings run by managing agents or freeholders. Where conflicts are found, steps should be taken to remove those conflicts or to discuss them with residents.
- Landlords should clearly outline their approach to escalating performance concerns with managing agents and freeholders. The approach should be communicated to all parties, including residents.
The report encourages collaborative working, noting that some landlords have found that support from their legal teams has improved responses from managing agents. Collaborative working with other building occupants and RPs has also improved responses. The report encourages landlords to share strategies in order to overcome challenges.
For more information on the Housing Ombudsman’s latest report, or if you would like advice on management arrangements please contact Victoria Smith within our Housing Management and Property Litigation team.