Three schemes have been approved by the Government to run redress schemes in the lettings industry.
They are The Property Ombudsman, Ombudsman Services and newcomer the Property Redress Scheme.
Nothing is known of the latter, which seems to have no PR operation or even a website.
All letting and management agents will be required to join one of these approved schemes later this year.
Making the announcement, housing minister Kris Hopkins said this would protect “millions of tenants and leaseholds” from “unscrupulous letting agents”.
All three schemes will offer independent investigation of complaints – with Hopkins specifically citing hidden fees and poor service.
Hopkins said that 60% of letting agents are already signed up to a redress scheme.
He called for the remaining 40% – estimated at 3,000 agents – to join one of the schemes ahead of the legal requirement, due to be implemented at an unspecified date later this year.
Hopkins said the new rules would strike the right balance between protecting tenants and not harming the industry with excessive red tape.
He said: “All tenants and leaseholders have a right to fair and transparent treatment from their letting agent. Most are happy with the service they receive, but a small minority of agents are ripping people off, and giving the whole industry a bad name.”
Hopkins also drew attention to other measures that are being introduced by the Government to protect tenants.
These include:
- a new voluntary code of practice that will set standards for the management of property in the private rented sector, with a view to making it statutory.
- a new help to rent guide, which will help tenants understand what they should expect and how they can take action if they are the victim of hidden fees or poor standards of accommodation.
- the introduction of a model tenancy agreement, which landlords and tenants can use for longer tenancies (three years, for example).
- guidance for local councils on how to tackle rogue landlords, protect tenants from illegal eviction and how to push for harsher penalties before magistrates.
- an ongoing review is considering how else the Government can improve property conditions in the private rented sector. A document inviting views on these issues was published earlier this year. The deadline for responses was March 28, and these are now being considered.
TPO Christopher Hamer said: “As the largest redress scheme in the property sector I am naturally very pleased that TPO has received official recognition from the government as an approved redress scheme.
“With 60% of UK letting agents already in membership with TPO, this will mean no change for them.
“However, TPO experienced a 34.2% increase in the number of consumer inquiries relating to letting agents not registered with TPO during 2013, which really underlines the importance of mandatory redress for letting and management agents.
“We will now emphasise to agents not currently registered with a redress scheme the benefits of joining TPO, not the least of which is that those agents will be able to demonstrate to their landlords and tenants that they follow the comprehensive set of standards contained in the TPO Code of Practice – the only Code of its kind in the industry.”
At Ombudsman Services, chief ombudsman Lewis Shand Smith said: “To obtain additional government approval is excellent news and further strengthens Ombudsman Services as the redress provider of choice for the property sector. It also endorses what we do and how we do it.”
Comments (9)
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Agree with both of the above.
Hopkins says all tenants and landlords have a right to a fair and transparent treatment from their letting agent. Some of the same from their Government would be helpful, too. More confusion over redress is the last thing required, especially when Shand Smith seems to believe his minority scheme is the one of choice, a line that adds to consumer confusion. The difficulty comes when membership is mandatory because while schemes may expel firms from membership only Powys and Anglesey councils appear to now hold real banning power. All the redress schemes will have to keep transgressors registered, even if they are not members, just as they do with sales agents who can be expelled but not barred from trading as it breaches their rights. Hopkins needs to do some serious work fixing the rogues, not making life easier for them by granting access to redress schemes that can't expel them, thereby giving them new window dressing opportunities to look as respectable as the rest.
Dodgy letting agents don't join such schemes nor do they abide by 'voluntary' codes of practise so who is going to police them? As far as I am aware, at the moment the only action the TPO can take is to kick an agent off the scheme if they transgress – hardly going to worry a rogue agent! These bodies need the power to heavily fine agents who don't comply and where agents fail to join a redress scheme, to have their businesses closed down. If not such agents will merrily carry on their way whilst reputable agents are penalised by having to pay hefty fees to be members of a scheme. All letting agents should be licensed and those that don't have CMP should not be allowed to trade.
Can you please explain why you think CMP is important. I can understand professional indemnity insurance to cover cash lost through the actions of one's staff but for the life of me don't understand how any insurance company covers losses that are solely attributable to the actions of the insured.
The whole system of CMP is simply daft and it is a mockery of everything that a single property deposit is enough to cover the premium for CMP and redress for a year.