Here I explore the oddity of the property management sector, it’s poor reputation, and why leaseholders don’t vote with their feet? Why doesn’t Adam Smith’s invisible hand work for leaseholders?

It was speaking to an established housing professional last week that got me thinking. They said “James I don’t know one good managing agent”. Crikey. What a sorry indictment of the sector. Not one! Our industry has been going for years, decades even. And yet an established player can’t name a single leasehold manager with a good reputation.

Money Grabbing Property Managers?

We all know the property management sector has an overwhelmingly negative perception. Most property managers are seen as money grabbing. Leaseholders’ service charges only ever go up. And the service they receive is often very poor.

But – we live in a free market economy. There  are lots of managing agents out there competing for lessee’s business. Many leaseholders are free to appoint a new agent. And many do. But still capitalism fails.

Capitalism is supposed to kill off inefficiency. In an open, competitive market, poor performers wither away. So why not in the property management sector? Is the property management sector exempt from Darwin’s Origin of the Species? With block managers it’s as if evolution has been reversed: “survival of the s#ittest”.

Improving Our Image

As a sector it’s really important that we debate this issue so that we can address this poor perception. We need to debate the issue as a priority. And look at ways we can improve. And one thing’s for sure it’s no good pointing the finger at our customers the leaseholders, with banal statements like “they should have read the lease.” As we all know the customer is never wrong.

If you’re reading this expecting me to tidy this question up with a slick summary I’m sorry to disappoint. I don’t know the answer as to (a) why leaseholders don’t get the service they deserve and (b) why managing agents have such a poor rep.

The ‘hassle factor’ of changing managing agents…maybe? Lethargy of the affluent…perhaps? Leaseholders see themselves as transient and too short termist to bother with any of that legislation stuff…possibly. I really, really don’t know. I’m not convinced regulation is the answer. Just look at the banks. I do think the sector needs much greater dialogue around value and service.