Pictured: Stephen Richards
Property management experts in the Birmingham office of national
commercial property consultancy Lambert Smith Hampton (LSH) have
welcomed new guidelines on residential service charges.
But they warn that without Government legislation, rogue
landlords could still mislead lessees, who could end up paying too
much for service charges without realising it.
A committee of professional bodies including the Association of
Chartered Certified Accountants, the Institute of Chartered
Accountants of England and Wales, the Royal Institute of Chartered
Surveyors and the Association of Residential Managing Agents have
issued extensive new guidelines to bring greater transparency in
the way agents and landlords manage and account for service
charges. The guidelines are aimed at achieving a standardised
approach which will protect residents and keep them better
informed.
But experts at LSH say that Government legislation would have
been preferable to self regulation, as landlords who are not
members of professional bodies will have no obligation to
comply.
Stephen Richards, Director of Property Management in LSH's
Birmingham office, said: "While we support the changes, they are
best practice guidelines rather than statute, and so risk creating
a two tier system of those landlords who apply good and transparent
accounting control for service charges, and those that don't. The
losers in the latter case will be the lessees."
He added, "If generally adopted across the industry, it will
standardise the way in which service charge expenditure is
presented, so there will be a common benchmark against which
standards can be measured. It should also help prospective
purchasers with their choice of property as they will be able to
compare the true state of finances of competing developments.
However, it still leaves loopholes for the unscrupulous who can
choose not to follow the guidelines. Legislation, which was
originally proposed in the Commonhold and Leasehold Reform Act
2002, but not implemented, would have been far preferable."
For more information about Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk