Managing Agents (Regulation)

I beg to move,

That leave be given to bring in a Bill to establish an independent regulator of managing agents; to make provision about the powers and duties of the independent regulator; to require managing agents to comply with a code of practice and to make provision about that code of practice; to make provision for a licensing scheme for managing agents; to make further provision about the regulation of managing agents; and for connected purposes.

Labour Governments past and present have been underpinned by a motivation to stand up for the voiceless and disempowered—those let down by broken systems—so that they can take control over their own circumstances. I present this Bill to the House because the failure to regulate managing agents has rendered leaseholders—ordinary hard-working people—voiceless, let down and disempowered.

This Government’s commitment to end the broken leasehold system is a welcome pledge for many, including leaseholders in places like my Uxbridge and South Ruislip constituency. Many have long been held hostage by exploitative management companies. In this Bill, we have the opportunity to take a further step forward in rebalancing the system, improving management standards and empowering leaseholders to hold their managing agents to account.

The Bill would establish a new independent regulator of managing agents. It would require managing agents to have mandatory qualifications and to pass a fit and proper person test. The regulator would be empowered to impose continuing professional development requirements. That would be underpinned by a clear code of practice set in statute, of which leaseholders would have clear sight and knowledge. The Bill would provide legal obligations and create a mechanism for redress for concerned leaseholders. The regulator would have powers to enforce compliance against managing agents and, ultimately, to remove them from the register of regulated agents. This would all be funded by the firms and individuals that are regulated. Those are reasonable and sensible steps forward.

Colleagues across the House have highlighted the plight of constituents who fall victim to unregulated managing agents, laying bare the failures of the current system. I thank my hon. Friends the Members for Basingstoke (Luke Murphy) and for Brighton Kemptown and Peacehaven (Chris Ward) for their support and advice on the Bill. In my constituency, I have been supporting residents living in Union Park in Cowley. The developer has walked away from that development, and the residents are being presented with a bill of £100,000 by the managing company, Ringley. Communal boilers have been left broken for two and a half years, and leaks under floorboards remain unfixed.

Although my team and I continue to work to support and advocate for those residents, the reality is that without a proper regulatory framework, managing companies like Ringley—which are appointed by freeholders—remain free to provide inadequate customer service, charge extortionate fees without justification and ignore residents. They seemingly serve vested interests, not the leaseholders who pay their fees. I am proud to be a member of the Labour for leaseholders group, working with hon. Friends to advocate for leaseholders in our constituencies and put pressure on managing companies to do better. We need a clear and robust legislative and regulatory framework, such as the one suggested by Lord Best and proposed in this Bill.

Of course, the leasehold system is not new, but the challenges that it presents today require the Government to act. Without mandatory qualifications and regulatory oversight, leaseholders remain vulnerable to inconsistent service quality, opaque charges and a lack of recourse when things go wrong. Managing agents are responsible for a variety of complex and important areas, including health, fire and structural safety, building maintenance, major works projects, and handling building finances and insurance. In leasehold blocks, managing companies hold substantial sums of leaseholders’ hard-earned money. The current system—or lack thereof—not only allows but empowers unqualified and incompetent managing agents. The Bill is not about extending red tape for red tape’s sake; it is about protecting hard-working people and their money.

Let me be clear: I am not attempting to tarnish all managing agents with the same brush. I know that some leaseholders have had positive experiences. The Property Institute—the professional body representing 7,000 property managers and over 360 managing agent firms—seeks to deliver safe, secure and well-managed homes. Members of the TPI are required to obtain accreditation and follow a consumer charter that demands honesty, fairness, openness and transparency. However, when distressed leaseholders sit across from me at my advice surgeries, those are not the words they use to describe their managing companies.

I commend the TPI for its work to stand up for leaseholders, and I welcome the supportive role it has played in the Government’s consultation on leasehold reform. However, a voluntary accreditation system in place of regulation exposes serious failures in the current framework. Relying on good faith actors to seek accreditation voluntarily means, by definition, that bad faith managing companies continue to operate freely in this country. We cannot accept that. For every managing company failing in its duty, there are multiple leaseholders being ripped off. The facts are clear, and inaction is not an option.

Earlier this year, FirstPort had its TPI accreditation stripped due to breaches of membership rules. Yet just three months later, it was readmitted. I recently visited Sherleys Court, a retirement complex in Ruislip managed by FirstPort. I heard stories from residents who, after a lifetime of hard work, moved in expecting to enjoy the next chapter of their lives. Instead, they were met with extortionate service fees with little to no explanation or itemisation. Their serious concerns about how their money was being managed were falling on deaf ears, and their feedback on shoddy maintenance work was once again ignored.

The story of the St Andrew’s Park development in Uxbridge—which is also managed by FirstPort—is just as dire. Residents report flooding, damp and mould issues that are not remedied. I recently conducted a survey of residents; a staggering 50% of respondents said that they had not received a response from FirstPort following attempts to communicate with the company. If I went to those residents and told them that, in just three months, their managing company had lost and then regained accreditation, I am sure they would question what had actually changed, and they would rightly ask what process had led to that decision.

The readmission of FirstPort lays bare the limitations of the current system and the urgent need for a clear regulatory framework to define and enforce the standards expected of all managing agents. The Bill will introduce an independent property regulator, grant licences to agents based on checks, including the fulfilment of legal obligations, and mandate qualifications to ensure minimum competency standards for agents and property managers. Without those provisions, leaseholders and the sector as a whole bear the financial burden of a lack of regulation. Research by the TPI shows that introducing an independent regulator would be largely cost-neutral, with the benefits of improved professionalism, accountability and consumer confidence offsetting any additional administrative costs.

There is a significant cost of inaction: a human cost. Too many people have been ripped off for far too long, but after years that have been financially difficult for so many, this Government have a drive to make people better off and feel listened to, and when it comes to the plight of leaseholders, this Bill is a necessary step in doing just that.

Since this Government were formed, we have rightly heard a lot about the housing crisis and how it is our responsibility to fix it. The crisis does not begin and end with bricks and mortar, although building 1.5 million homes is an absolute imperative. It also comes down to a deeper concept: security in our homes, for those in the private rented sector and in social housing, and for homeowners too. This Bill can help towards delivering security for leaseholders, who for far too long have been left in a cripplingly insecure and exploitative situation. The total failings of the leasehold system extend beyond that which can be fixed by one piece of legislation, but the Bill will be a vital step forward in the Government’s mission to deliver justice for all leaseholders.

They say that your home is your castle, but for too long leaseholders have often felt that their home is a prison. They feel under attack by their management companies—the companies that are there to serve and protect them, and to whom they pay a significant sum in management fees for the pleasure. With this Bill, we can build defences through a proper regulatory framework, and by ensuring that companies are properly qualified and an accountability mechanism clearly exists. Those measures are all desperately needed.

That Danny Beales, Joe Powell, Nesil Caliskan, Chris Bloore, Chris Curtis, Dr Rupa Huq, Sarah Russell, Rachel Blake, Andrew Cooper, James Naish, Daniel Francis and Cat Eccles present the Bill.

Danny Beales accordingly presented the Bill.