Few housing associations have chosen to switch building management companies after news of suspected pricing emerged last winter, according to a Yle study.
Mia Koro-Kanerva from the Federation of Property Management said that while the case had raised suspicion across the industry, it was still relatively rare for housing associations to fire their management company.
“While ten percent of housing associations have asked for competing offers from other management companies, that’s not a lot,” she said.
In February, the Finnish Competition and Consumer Authority (KKV) said the Finnish Property Management Federation and six property management companies had formed a price cartel to artificially increase the sector’s profits.
Half a dozen property management companies and the industry association have reportedly conspired to drive up prices. The Property Management Federation denied the allegations, saying the watchdog’s findings were incorrect and were only suspicions at this point.
50 terminate contracts with Realia
Around 50 housing associations have terminated their agreements with market leader Realia Services Oy, which faces the highest fines offered, some 15 million euros.
“But it can also be due to annual fluctuations,” said Veli Huotari, Senior VP at Realia Isännöinti.
Realia has some 6,000 customers, and around 100 are now looking for offers from competitors. Huotari said that to increase transparency, the company introduced an electronic system that allows boards of housing associations to monitor prices and billing.
Koro-Kanerva of the Property Management Federation said that as housing associations gather for shareholder meetings in the coming months, more boards may decide to seek new deals.
In February, the CEO of KKV pointed out that the inflated prices were eventually paid by residents of housing associations, describing the suspicion of pricing by building management companies as “systematic cartel activity and sustainable ”.
The market court will rule on the case in the fall and impose possible sanctions. The watchdog is demanding fines totaling 22 million euros for the industrial group and individual companies, which are based in different regions of the country.