They are looking for an emergency exit from the houses

A series of large-scale utility accidents forced government agencies to think about revising their approach to managing apartment buildings. Thus, the Ministry of Construction, together with the relevant State Duma committee, can tighten the rules for licensing management companies (MCs) or oblige them to join regional self-regulatory organizations. But some market participants warn that the industry is already heavily regulated and more oversight will lead to consolidation of the business.

The Ministry of Construction should provide proposals for the development of general standards for the management of apartment buildings and, together with the State Duma committee, develop proposals for strengthening control over management companies. This is stated in the decision following a meeting of the Russian State Council Commission on Construction, Housing and Communal Services and the Urban Environment, held at the end of 2023. Kommersant has a copy of the decision dated January 24, 2024.

Chairman of the State Duma Committee on Construction and Housing and Communal Services Sergei Pakhomov explained to Kommersant that as part of strengthening control over management companies, the licensing system for such companies could be revised with maximum tightening of control, rules for admission to the market and removal of unscrupulous participants from work. Another option, he adds, is the transition from licensing to mandatory membership in self-regulatory organizations (SROs) with special powers of the regions. According to Mr. Pakhomov, in the second case, the principle of “one region – one SRO” can be implemented in order to prevent competition between organizations within one entity. The Ministry of Construction did not answer Kommersant’s questions.

The question of increasing control over the work of management companies arose again after several mass accidents at utility network facilities that occurred in early 2024, points out Sergei Pakhomov. Thus, in January, in Klimovsk in the Moscow region, residents of 173 apartment buildings were left without heating after a heating main broke due to an accident in the boiler room of a local cartridge factory. As Mr. Pakhomov notes, management organizations play a special role in the housing and communal services sector, and among such companies there are still unscrupulous players, so the management system for apartment buildings needs to be transformed. Ilya Volfson, a member of the State Duma Committee on Construction and Housing and Communal Services, also says that the existing regulatory framework does not allow either regional or municipal authorities to influence the work of “negligent” management companies, since they cannot interfere in contractual relations between homeowners and management companies.

Today, management companies are required to obtain a license, but they can join an SRO voluntarily. To obtain a license, a company must, among other things, have specialists in repair and maintenance work on its staff, open access to information about its activities, and not have revoked licenses. In addition, the head of the management company must have a qualification certificate, and the manager must prove the absence of criminal records and orders for violating activities in the service sector of apartment buildings.

General Director of the Samolet Management Company Alexey Akindinov considers it necessary to strengthen the standardization of work in the housing and communal services sector and strengthen control over the implementation of the management company’s standards. “Currently it is very fragmented, and there are too many unscrupulous players who “tour” sites without investing in infrastructure and not complying with operating rules,” he notes. According to him, system participants are able to guarantee the quality and standard of services. A similar picture was in the development business, and after taking measures such as the transition to project financing, the situation returned to normal, Mr. Akindinov points out. Vice-President of the New Quality Association (includes 25 management companies, including PIK-Comfort) Oleg Malakhov adds that tightening the requirements for the work of management companies will increase the investment attractiveness of the apartment building management segment.

General Director of RKS Development Stanislav Sagiryan notes that the transition from licensing to mandatory entry into the SRO will lead to the flushing out of unscrupulous players from the market, but at the same time will create a trend towards consolidation. First Deputy Executive Director of the association of enterprises in the housing and communal services sector “United Housing and Communal Council” Olga Serdyuk points out that work within the framework of the SRO will be able to ensure the financial responsibility of the management company and the validity of the tariffs at which the companies operate. General Director of PIK-Comfort Vasily Levin adds that for large regions one such SRO may still not be enough.

The President of the Association of Real Estate Service Companies (according to his own data, unites more than 1 thousand management companies and homeowners associations) Nikita Chulochnikov says that strengthening licensing requirements will most likely lead to a redistribution of the market in the interests of state management companies. Under the guise of fighting unscrupulous companies, bona fide players may be forced out of the market on formal grounds, Mr. Chulochnikov fears.

Deputy General Director of Astrum Moscow Management Company Valentina Tugusheva notes that a utility accident is a sequence of events from the maintenance of networks leading to the house, the maintenance of boiler houses that provide the supply of heat and hot water to houses, to the maintenance of intra-house networks. Blaming the management company, according to her, is the simplest solution, but it is important to organize the service in such a way that it does not lead to an accident in the house, which requires a lot of complex work. Tightening the responsibility of the management company, especially in the old housing stock, where the state has not fulfilled its obligations for major repairs, is unfair, agrees the director of the Lenta Management Company, Alexey Ignatiev. Already, management companies are being turned into providers of public services, artificially driving companies into debt, he notes.

Daria Andrianova