From 1st October 2014 letting and managing agents became legally bound to become a member of one of three redress schemes, known collectively as Ombudsman Schemes. These are:
The legislation applies to people who manage properties in the course of business such as managing agents who manage leasehold blocks on behalf of the freeholder (where occupancy is under a long lease of over 21 years), leases granted under the right to buy, and shared ownership leases. It also includes organisations who manage property on behalf of a landlord such as letting agents (both high street and web-based). It does not however apply to ‘informal’ arrangements such as those who are helping out others who own property or who carry out repairs and maintenance on their behalf on an ‘ad hoc’ basis.
With regard to resident management companies, when they own the freehold and self-manage (such as under collective enfranchisement there is no such requirement to join an Ombudsman scheme. This is because under legal definition, property management work only arises where one person instructs another person to manage the premises and here, the freeholder and the management company are the same. Where a resident management company does not own the freehold (such as being established through right to manage) and self-managed rather than using a managing agent, this would also be excluded as the work is only in respect of their own premises and would not be operating in the normal course of business.