Property Management Companies
The question
To ask the Secretary of State for Housing, Communities and Local Government, what assessment his Department has made for the effectiveness of the Leasehold and Freehold Reform Act 2024 in preventing vertical integration within management groups, where managing agents appoint their own organisation and sister, or associated companies as Company Secretaries and maintenance providers.
Answered by Matthew Pennycook
It is unacceptable for a managing agent to refuse to vacate a site when it loses a contract to another agent. Landlords may seek legal advice on possible courses of action when such circumstances arise. These may include making a formal complaint to the relevant redress scheme or seeking an injunction in the County Court. Leaseholders, including resident directors, can also seek guidance and free initial legal advice from the government-funded Leasehold Advisory Service (LEASE).
The previous government’s Leasehold and Freehold Reform Act 2024 contains no provisions designed to prevent managing agents using subsidiary, sister, or associated organisations to deliver services.
The draft Commonhold and Leasehold Reform Bill contains no provisions relating to embedded management companies. We await the conclusions of the pre-legislative scrutiny of the draft Bill being undertaken by the Housing, Communities and Local Government Select Committee and will review the feedback received before publishing a substantive Commonhold and Leasehold Reform Bill.
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