'Treating people as piggy banks': The property management firm 'taking their residents for fools'
One of the UK’s biggest property management firms has been accused of treating residents “like piggy banks”.
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People in properties managed by Residential Management Group (RMG) have alleged mismanagement and overspending by the company.
RMG, which manages more than 80,000 homes, says its service charges are independently audited and 95% of complaints receive a response within 10 days.
Tim, whose real real name we have changed, was excited to buy his own home when he moved into his flat in Bristol. Now, just three years later, he dreads walking through the door.
When he bought the flat in 2022, the service charge by RMG was around £105 a month, but Tim now claims that's more than tripled to £383.
Tim believes RMG regularly overspends its budget on repairs to his block of flats, slapping residents with surprise costs which they're forced to pay or face debt collectors.
He says conflict with the company never seems to stop, and he's also changed his work pattern to dedicate half a day every week to dealing with them.
“They just avoid and avoid and avoid and unfortunately as leaseholders because we've always got the pressure of them charging us the legal fees for management,” Tim told LBC.
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“Often financially it's not worth us even challenging anything.
"It's just unrelenting... their whole business model is just based on people giving up... and (he) can see why people do.
"The stress it causes, you can't imagine it."
Sam Lane from housing action group Acorn told LBC he's "not surprised" by Tim’s claims, as he’s heard "horror stories" from residents of buildings managed by RMG.
"They’re treating the properties they manage as piggy banks," Mr Lane said.
"It is awful but it's also not surprising when you've got such a big company - a private company, making millions in profits every year - to find out that they're trying to take their residents for fools".
Bernie in Bury claims she had similar experiences of RMG before leaving the management company.
She says she has since looked over what she was charged by RMG for work done, and claims it was "two or three times the going rate of what things would cost", after comparing the price with what local tradesmen said they'd have charged: “Some of the payments were just ridiculous.
“For example we paid £300 for an emergency key for the cleaner. Now, the cleaner just has to press a trade button. She didn't need a key. And £300 is a lot of money for a key."
Meanwhile, Shelagh in Edinburgh claims the management company is "simply not doing its job properly".
"It feels like modern day feudalism,” she lamented. “We didn't get any choice over who was appointed to do this job".
Housing developers often appoint management companies to run the properties they've built - but Shelagh doesn't think that's fair in this case because RMG is directly owned by the developer Places for People.
Tim, Bernie and Shelagh are not alone in expressing their grievances with RMG.
A Facebook group called 'Residential Management Group Rip Off People's Pockets', for example, has over 8,000 members, and LBC has learned MPs are having to get involved to help people get refunds for what they’ve described as unfair charges.
James Frith, the Labour MP for Bury, was contacted by Bernie when she was having problems with RMG.
He says he saw "endless examples" of properties being "neglected".
"The lion's share of the time, these are homeowners that are not getting anything [like] what they've paid for,” Mr Frith claimed. “In fact, they're expected to pay more and more and get less and less."
Although the Leasehold and Freehold Reform Act 2024 has received Royal Assent, the government admits the majority of the provisions are not yet in force.
And with the act including a 'new right to request information about service charges and the management of (a person's) building', people living under RMG are calling on the government to prioritise enforcing these changes.
For Tim in Bristol, who wants to move out while his neighbour - a single mum with three kids - is in "crippling debt because of RMG", those changes can't come soon enough.
The Housing Ombudsman Richard Blakeway told LBC that "charges can be a complex and challenging area for both residents and landlords.
"It is important that there is good transparency and proactive communication. Where landlords have prioritised this, we have seen better outcomes. This transparency and communication also helps residents understand the charges and reasons for the levels that are set.
"It is also important that landlords consider what payment support options are available and work with residents on this. This is good practice to ensure residents are not placed in a detrimental position".
A spokesperson for RMG told LBC: “RMG receives a fixed fee for its property management services and does not benefit or make any profit from increased service charges. Our role is to act on behalf of landlords and leaseholders to maintain and manage shared spaces.
“Service charges are calculated annually to cover these costs and are independently audited with full transparency to customers, who receive detailed breakdown of work required and how that money is spent. Any underspend is returned to them.
“There may from time to time be a requirement to temporarily increase service charges to cover unforeseen emergency works, but we keep fees as low as possible while maintaining a high quality of service.
“Permanent changes typically rise in line with inflation. However, we fully understand the impact rising costs have and offer support to those who might be struggling, including flexible payment plans.
“We take all complaints seriously and 95% are responded to within ten days. We also hold regular meetings for customers to raise any queries or concerns directly with us.”