Colin Hussey of legal property management specialists Brady Solicitors shares his highlights from the 2016 ARMA Conference.
This was my fifth ARMA Conference and whilst I perhaps had a clear head to thank after a surprisingly early Wednesday evening at the ARMA Dinner, I don’t think I’m exaggerating when I say that there was a real sense of revolution and change in the room, led from the front by ARMA CEO Dr Nigel Glen.
Leaseholder, former managing agent, future-gazer – Dr Glen appears to be a man with his finger on the pulse and a clear understanding of the dynamics at play within the leasehold sector.
He also did a sterling job of reminding managing agents why they should be a part of ARMA as a force for good in the industry. Representing a law firm with its roots firmly in Nottingham, we were also encouraged to hear Dr Glen’s commitment to tackling the regional bias.
Having set the tempo for the day, Dr Glen handed over to Karina Ray, who spoke about ARMA’s three year benchmarking programme.
This anonymous tool enables managing agents to benchmark themselves against their peers on a number of criteria including financial performance and human resources metrics. This seems to be a very tangible initiative from ARMA to help those managing agents, who really want to improve, to assess their performance and identify areas for improvement. I suppose this was the subtle difference: rather than just talking of change there was a focus on the tools to facilitate and support that change.
Squaring the circle
Biggest brain of the day award undoubtedly goes to Philip Rainey QC, whose thought-provoking session entitled ‘Key areas for reform’ went to the heart of issues with leasehold law.
The notion that ‘leasehold is broken’ is not a new one (indeed it emerged as a strong theme in our recent national leasehold survey) but it was encouraging to hear a highly intelligent assessment, together with potential solutions.
Philip asked the question of what leasehold actually is and what is the law looking to achieve – is it the creation of an asset class? Or a way to meet housing needs? Fundamentally, there is a circle that has to be squared here: developers need to make a profit or they will stop building; property managers need to earn a decent living or they will go out of business.
A time to be bold?
Commonhold doesn’t work and just doesn’t really exist at the moment; we know that. But Philip Rainey referenced how Australia’s strata title has been through many revisions to get to its current stage, and suggested that we focus our attention on fixing commonhold but it has to be line with the agreed and known objectives. Strata title is a form of shared ownership, with no freeholder.
From our perspective, however leasehold law and the leasehold sector evolves, we will still have the scenario of individuals flung together by virtue of buying a leasehold property in the same block. Individuals with different views as to how the service charge budget should be spent and different views on harmonious communal living.
Resolving the problems associated with communal living is, I would argue, one that is more for the anthropologists than the law-makers.
Philip Rainey QC also raised the ticking time bomb of leases on retirement flats. Many of these sheltered living units were built 15-20 years ago, which means that the 99 year leases are now getting close to a time when they need extending. This is highlighting how many of the owners of these retirement flats simply did not understand what they were buying into; exit fees are high and the extensions both expensive and problematic.
I couldn’t help feeling though that there are few who would disagree with a complete separation of retirement living from the standard leasehold process that offers true protection to owners of retirement property.
Peanuts and monkeys
This ‘problem at the conveyancing stage’ was also aired during the panel discussion later in the day. To bring some balance to the ‘it’s all the conveyancer’s fault’ argument, we would ask what a leasehold buyer can honestly expect if they are not willing to pay more than a bargain basement price for their conveyancing?
We know that conveyancing is incredibly price-sensitive but, like many things in life, you get what you pay for. And a £299 conveyancing fee probably doesn’t stretch too much expert time for a lease review…
A balanced reform
Jim Fitzpatrick spoke on behalf of the All Party Parliamentary Reform Group (APPRG), reinforcing that leasehold is firmly on the national agenda. I was pleased to hear ARMA will be involved on the inside as it’s going to be essential to have a sensible and technical voice at the heart of the debate on leasehold reform and ensure the baby isn’t thrown out with the bathwater. Should this opportunity be extended to other practitioners in the sector?
So, a sense of revolution?
It would take a braver person than I to predict the future of leasehold but, on the evidence of the 2016 ARMA Conference, there is a strong sense that change – finally – is afoot.