Ombudsman calls for stronger regulation of managing agents

The Ombudsman's Spotlight Report, which looks at landlords' engagement with private freeholders and managing agents, examines learning from cases involving a relationship between social landlords and managing agents appointed by private freeholders.

The report sets out what the Ombudsman has found to help raise awareness of the challenges faced by landlords and residents. It makes 14 recommendations and proposes some questions for landlords to use as a basis for self-assessment.

Amongst its list of recommendations, the Ombudsman asked that local authorities consider the report in "the context of decisions relating to Section 106 agreements within their area and how to ensure social landlords are involved at the earliest opportunity".

According to the report, the increased complexity of these arrangements seems to correlate with an increase in confusion, delay, and unfairness. This contrasts with the Ombudsman's efforts to simplify complaints processes and improve outcomes, the watchdog said.

The Ombudsman examined 62 cases investigated over one year where the landlord had to engage managing agents and private freeholders to resolve issues. It found a high level of maladministration at 64.5% in those cases, about a third higher than the average for casework in the same period.

Cases detailed in the report highlighting situations in which landlords and managing agents can clash include the repeated loss of hot water during winter, leaking roofs and unexplained service charges.

Richard Blakeway, Housing Ombudsman, said the report "shows that the relationship between social landlords and managing agents is often strained and, at worst, dysfunctional. Landlords often feel a tension between their social objectives and the business objectives of some managing agents and some of the freeholders that appoint them. This tension can result in deep unfairness for residents".  

Mr Blakeway added: "Without a standalone regulator driving consistency and improvement, the managing agent sector presents significant challenges and risks to social landlords. As well as raising awareness of these challenges, we also want this report to support landlords to assess how well their own approach is working, identify areas to make improvements, and encourage greater collaboration to overcome some of these challenges.

"Through our casework we have noticed an increasingly complex landscape with many and varied arrangements. There is often confusion, not just for the resident, but also the landlord and third-party managing agent and/or freeholder as to responsibilities."

The Ombudsman added: "Central to this is accountability. Residents should be able to hold the professionals that are responsible for the quality, safety and management of their homes to account for ensuring that defects and repairs are resolved and that their complaints are handled in a timely manner. In turn, landlords should also be able to hold third party freeholders and managing agents to account in relation to discharging their responsibilities.

"I would encourage landlords to consider the learning provided by this report and set out how they may do things differently using our self-assessment questions as the basis."

Adam Carey