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Referrals To The Property Ombudsman Increase

Referrals To The Property Ombudsman Increase

Huge Rise In Referrals To
The Property Ombudsman

There was a 42% increase in the number of referrals to The Property Ombudsman (TPO) last year, according to The Property Ombudsman’s Annual Report for 2014.

The latest publication of The Property Ombudsman’s annual report shows that six months after the introduction of new legislation, making it a legal requirement for UK letting agents and property managers to join one of the three government approved redress schemes, the number of letting agencies and property management companies signed up to the TPO scheme has reached 12,915, a new record level.

The 42% increase in registered property lettings and estate agent businesses brings the total number of UK estate agents and property lettings offices offering free, independent route to resolve property and tenancy disputes to 26,735.

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Letting Agent Complaints On The Rise According To Property Redress Scheme

Letting Agent Complaints On The Rise According To Property Redress Scheme

Complaints About Lettings Agents  On The Rise
According To Property Redress Scheme

Due to the fact that more tenants and property owners are now aware of their consumer rights, especially the right to redress, there has been a month on month increase in the number of complaints being made against lettings agents, property management companies and estate agents.

The Property Redress Scheme, (PRS), is just one of three consumer redress schemes set up by the Government to provide fair and reasonable resolutions to disputes between the public and property agents.

From 1 October 2014 it became a legal requirement for all lettings agents, property managers and estate agents, as defined by legislation, in England to belong to one of the three Government approved redress schemes, which are:

The number of complaints raised with the PRS is increasing month on month. Of the complaints raised so far,

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MPPT Spotlight are focusing on Tenants this week with a series of articles on getting the best out of tenant

MPPT Spotlight are focusing on Tenants this week with a series of articles on getting the best out of tenants

Tenants Admit Having Problems With Landlords And Letting Agents

55% of tenants in the UK’s private rented sector (PRS) have experienced problems with their landlord or their appointed letting agents according to the latest research from the Association of Residential Letting Agents (ARLA).

The most common issue which affected 31% of PRS tenants was the length of time taken to fix problems in rental properties including issues with boilers, heating and electrical outlets.

Once a problem was raised, tenants have waited an average of 36 days for the problem to be fully resolved. However over 14% of PRS tenants never had their rental property problems fixed at all, according to the research.

18% of tenants surveyed also reported frustrating delays with landlords not replacing worn out fixtures and fittings on demand, including requests to replace old or damaged kitchen cupboards or tired and worn carpets.

14% of the tenants surveyed, felt that their complaints about repair issues were either ignored or brushed off by landlords or their appointed letting agents.

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3 Compulsory Redress Schemes To Investigate Lettings Complaints

3 Compulsory Redress Schemes To Investigate Lettings Complaints

3 Compulsory Redress Schemes
To Investigate Lettings Complaints

The Government have approved three compulsory redress schemes to offer landlords and tenants in the UK private rented sector independent investigation into complaints in the property management and lettings industry, bringing them in line with redress schemes already in operation for residential property sales.

The 3 lettings industry redress schemes are:

  • The Property Ombudsman
  • Ombudsman Services Property
    • The Property Redress Scheme 

The new schemes will consider all complaints made by tenants and landlords including non-disclosed fees and poor service delivery, and as with residential property sales where a complaint is upheld, tenants, landlords and leaseholders could receive compensation.

Two of the three redress schemes have been around for a while and The Property Ombudsman (TPO) is probably the most recognised of the two pre-existing schemes but little is known about the new Property Redress Scheme.

Most letting agents in the UK are already registered with at least one redress scheme, however 40% of the entire lettings industry, estimated to be around 3,000 agents, are to be encouraged to join up before membership is made mandatory later this year.

Housing Minister Kris Hopkins said that he hoped the new rules would strike the right balance between protecting tenants in the UK private rented sector and not harming the UK lettings industry with excessive red tape. The new redress schemes were just one part of the government’s efforts to secure a better deal for tenants in the PRS, stating: “All tenants and leaseholders have a right to fair and transparent treatment from their letting agent. Most tenants 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. That’s why we will require all agents to belong to one of the official redress schemes. They will ensure tenants and landlords have a straightforward route to take action if they get a poor deal, while avoiding excessive red tape that would push up rents and reduce choice for tenants.”

The Property Ombudsman, Christopher Hamer said: “TPO experienced a 34.2% increase in consumer enquiries relating to unregistered letting agents during 2013, which really underlines the importance of mandatory redress. Whilst my role as Ombudsman means that I am not a regulator and I can only review complaints after a dispute has occurred, making redress a legal requirement for lettings is a positive move. Clearly it would be better if complaints did not arise in the first place and robust legislation to enforce controls was in place.”

There are thousands of decent letting agents in the UK but there are also a fair proportion of rogue agents who operate under the radar, that lack the much needed transparency on fees and who are fleecing both tenants and landlords alike.

Landlords should ensure their appointed property managing or letting agent is registered with the Association of Residential Letting Agents (ARLA) or the UK Association of Letting Agents (UKALA).

Most UK tenants are unaware that they could be leaving themselves open to exploitation if the agent is not a member of at least one of the regulatory associations.

Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current Buy-To-Let Mortgage Terms

Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current Buy-To-Let Mortgage Terms

Industry welcome to weak tenants’ charter that could see UK PRS landlords at odds with

Buy-To-Let Mortgage Lenders

The new tenants’ charter was announced by the Secretary of State for Communities and Local Government (CLG), Eric Pickles, last Wednesday, allowing tenants to ask for longer tenancies and better transparency of letting agents’ fees.

The new tenants’ charter will also aim to force all lettings and property managing agents controlling PRS rental properties to join a compulsory redress scheme.

The Tenants’ Charter, published for consultation, outlines what tenants should be looking out for at every stage when renting a property in the UK’s private rented sector, including lettings agents having to inform customers what all their fees are upfront, before they have committed to anything, including visiting a property.

However, the introduction of these terms under the banner of the tenants’ charter could threaten the business future of large numbers of landlords who would technically be in breach of the strict buy-to-let mortgage terms imposed by many mortgage lenders, which generally stipulate that tenancy agreements are to be for a period of no more than one year.

Secretary Of State For Communities & Local Government, Eric Pickles

Secretary Of State For Communities & Local Government, Eric Pickles

Mr Pickles stated that the Government intend to publish a code of practice setting standards for the management of property in the private rental sector (PRS) along with guidance setting out the role of public bodies in protecting tenants from illegal eviction.

Mr Pickles said: “This government is on the side of hardworking people and the last thing we want to do is hurt tenants and kill (property) investment by increasing costs and strangling the sector with red tape. But tenants deserve better value for money, and dodgy landlords should be under no illusion they can provide a shoddy service with impunity. These proposals will raise the quality and choice of rental accommodation, root out the cowboys and rogue operators in the sector, and give tenants the confidence to request longer fixed-term, family-friendly tenancies that meet their needs”

Mr Pickles also said that the Government will develop a model tenancy agreement which will clearly set out the rights and responsibilities of tenants and landlords, and ensure families can benefit from longer tenancies, without changing the existing legal framework for the rental market. He said “Longer tenancies will give families greater certainty and security, especially for those with children at school, and reduce costs for both tenants and landlords who will not have to pay letting agents to arrange frequent contract renewals.”

Clive Betts MP, Chair of the Communities and Local Government Committee said: “I am pleased that the Government has embraced many of the recommendations in our private rented sector report. The proposals for a tenants’ charter and model tenancy agreements reflect our calls for greater awareness of rights and responsibilities. Far too often the security needed by families is not being provided by the private rented sector. I am pleased, therefore, that the Government has listened to what the Committee said about the need for more family friendly tenancies. It is also welcome that the Government is taking forward our proposal to allow rent and housing benefit to be clawed back when landlords have been convicted of letting out dangerous property. The Committee will be watching closely to ensure that they are translated into action. We will also press to ensure that the Government’s gathering of information on selective licensing leads to action to raise standards. Much remains to be done if renting is to become an attractive alternative to owner occupation. It is disappointing; therefore, that the Government does not see fit to crack down on cowboy letting agents and their rip off fees and charges. It is also regrettable that the Government has declined to give local authorities the powers and freedom they need to improve housing in their areas.”

Tenants Charter Proposals For Longer Tenancies Breach Mortgage Lenders Current
Buy-To-Let Mortgage Terms

Property professionals generally agree with the introduction of the new tenants’ charter but many think that the Government have sidestepped the opportunity to enforce much tighter regulation of landlords in the private rental sector and lettings and property managing agents in particular and many feel that the new measures fall short of what is really needed.

It will be interesting to see if the Government put pressure on the banks and mainstream mortgage lenders to abolish or ignore such limiting clauses, allowing them to deliver on the real aim of the tenants’ charter.

Caroline Kenny, an executive of the UK Association of Letting Agents (UKALA) wants the Government to build on the experience and expertise of those industry bodies which already require higher standards of their members. Commenting “Responsible agents who choose to belong to professional bodies which require client money protection insurance, impartial redress and an adherence to a strict Code of Practice are forced to compete with those who show little regard to professional standards or the needs of their clients. UKLA believe that this package of proposals represents a missed opportunity for the Government to make mandatory the kind of comprehensive protection offered by the UK Association of Letting Agents and other industry regulatory bodies, which are called UKALA & NLAfor by those working in the property industry and needed by hardworking consumers who are unable to differentiate between good and bad letting agents.”

Richard Lambert, Chief Executive of the National Landlords Association (NLA), said: “The NLA has long argued that private renting can be far more flexible than commonly perceived, and we need to tap into this potential to meet the changing needs and expectations of those who rent. We look forward to working with government to make a success of these proposals. However, we believe that the Government has missed an opportunity to require greater professionalism of letting agents. While the requirement to belong to an approved redress scheme is a step in the right direction, it does little to protect the financial interest of landlords and tenants working with unregulated agents.”

Residential Landlords Association

Join The Residential Landlords Association

Alan Ward, Chairman of the Residential Landlords Association (RLA) welcomed the Government action to improve tenants’ understanding of their rights and responsibilities saying: “Tenants take more trouble buying a second-hand car than renting a house” Ensuring that tenants and landlords each understand clearly their rights and obligations to one another ensures a balanced relationship and enables them to hold each other to account based on the large number of laws already in existence. It will also play a vital role in rooting out those willfully criminal landlords who reap misery on tenants. We look forward to working with Ministers on the Charter as well as on how to best get this information to tenants.”

RICSPeter Bolton King, RICS global residential director, said “The long overdue announcement was definitely a step in the right direction. The lettings sector has for far too long been the Wild West of the property industry, with many tenants having absolutely nowhere to go should they wish to complain about shoddy service. The introduction of a code of practice specifically covering those managing rented property should certainly improve standards.”

Chief Executive of the Housing & Homelessness charity Shelter, Campbell Robb said “This announcement is recognition that current private renting arrangements are not fit for families with children, who need greater long-term stability. This is a welcome step in the right direction, and ministers now need to consider how to make longer tenancies a real choice for the families desperate for a more stable place to live.”

The announcement of the new Tenants’ Charter was good news for consumer champions, Which? Who have been campaigning since 2007 when they first called for an amendment to the Consumers, Estate Agents and Redress Act 2007 requiring letting agents to join an approved complaints scheme, just as property sales agents are. The consumer groups investigations also discovered earlier this year that major letting agents are acting unlawfully by not being upfront about the fees charged to clients.

The Enterprise and Regulatory Reform Act 2013, looks set to be implemented in Spring 2014, giving all landlords and tenants access to a complaints scheme. This will mean that 40% of agents who currently aren’t signed up to a redress scheme will have to become members

Which? Executive Director, Richard Lloyd, said: “Renting is now the only housing option for millions so we’re pleased to see the Government taking steps to address problems in the lettings market. Making charges clear upfront will enable people to shop around more easily, and longer tenancies could mark the end of unnecessary renewal fees. The new legislation giving landlords and tenants access to a complaints scheme now needs to be brought in as soon as possible and there must be strong action taken against any agent in breach of the scheme.”

  • Do you think the proposals go far enough?

Take our Poll on the Tenants Charter or leave a comment below!

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More Red Tape For LandlordsRed Tape Increases For Private Sector Landlords
Despite Government Promises

Despite numerous promises to reduce the amount of red tape property professionals had to deal with, there are now even more legal requirements to let and manage rental properties.

The coalition Government started an initiative called the Red Tape Challenge, aiming to reduce the time and associated financial costs incurred by businesses and consumers in complying with unnecessary legislation.

However, recent Government announcements will increase the amount of red tape and infuriating processes that landlords and letting agents have to deal with

The Residential Landlords Association (RLA) say there are currently over 100 national regulations governing the letting of a rental property in the private rental sector.

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Complaints against letting agents increased drastically during 2012, occupying the majority of the Property Ombudsman’s time and increasing the organisation’s workload.

During 2012, the Property Ombudsman received a total of 15,782 complaints, including those made against both Estate agents dealing with property sales and lettings and property management agents concerning renting property.

The increase in volume was a 12% jump up from 2011 when there were 14,066 complaints and landlords were slightly more likely to make a complaint about letting agents rather than the tenants complaining about landlords.

In addition there was also a 39% increase in the number of cases referred for formal review or easy resolution. In total, the Ombudsman supported 73.8% of complaints against lettings agents.

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Hi all I read the following article in the Guardian this week and I thought I would share it with you as I happen to agree with the viewpoints stated by the author Heather Kennedy.

Please take a couple of minutes to read the following…. 

Is Shelter’s campaign against ‘rogue landlords’ helpful for private tenants?

Law-breaking landlords aren’t the sole blight on the private rented sector, despite Shelter’s eye-catching campaign

How do you feel if I say the words “energy performance certificate”? What about “London landlord accreditation scheme”? Is your pulse racing? I didn’t think so.

The dry and cumbersome language of the private rented housing sector is not exactly the stuff of captivating media headlines. For those of us trying to shout from the rooftops about how bad things are for private tenants right now, this can present a problem.

One organisation that has succeeded in capturing widespread attention is Shelter, with its simple and popular ‘evict rogue landlords’ campaign. The housing charity is encouraging residents to report dodgy landlords to their local authorities, who can take legal action if they are found to be operating outside the law.

The message has gained traction. Across the public debate on welfare and housing, the concept of the “rogue landlord” has caught on fast. It is central to our understanding of what is wrong with the private rented sector.

So if talk of ‘rogue landlords’ has helped to make the difficulties of life as a private tenant mainstream news, what’s the issue?

The problem is that Shelter’s concept seduces us into believing the deep-rooted problems in the private rented sector can be eradicated by punishing a small, malignant minority when in fact large-scale policy overhaul is now urgently needed.

There are plenty of fully legal landlords happy to bully their tenants, impose huge rent increases and end contracts on a whim.

Some renters and their landlords have come to consider this acceptable behaviour, so a rogue is always someone else: someone a friend of a friend told you about, or that one you saw on the telly. Never the landlord you have – or the one you are.

Of course unlawful evictions, harassment of tenants and illegal hazards need to be tackled. But I speak to private tenants across London every day and for most of them, current legislation offers them little or no protection against the problems they face.

For those landlords who are operating illegally, local councils have a feeble track record at prosecuting them, as Shelter points out. What Shelter doesn’t explain is how councils are supposed to find the time and resources to deal with the spiralling number of complaints from tenants, and at a time when funding for local authorities is being cut by central government.

Councils are already overwhelmed by the sheer volume of complaints they receive and can often only hope to provide basic dispute resolution between landlord and tenant.

For Shelter to suggest that we can prosecute our way out of this problem using current legislation is at best naive and at worst disingenuous.

The figure of the rogue landlord as a modern-day folk devil might be media-friendly, but it is meaningless for the majority of private tenants.

We need nuanced debate about the private rented sector, to reflect the diverse and complex experiences of tenants.

Shelter does some excellent work getting housing issues into the mainstream press, but right now its analysis is being allowed to dominate the debate.

Unlike council tenants, who have rich a tradition of self-organisation and representation, private tenants have no collective identity or voice.

This is partly why we’ve found it so difficult to challenge unfair treatment. It’s only now, as pressures on private tenants reach an apex that we’re beginning to speak as one and forge this collective voice.

Not until tenants are allowed to define their own campaigns and solutions will we begin to see the deep rooted change to the private rented sector we so desperately need.

Heather Kennedy is the founding member of Digs, a support and campaign group for private tenants in Hackney

This content is brought to you by Guardian Professional. Join the housing network for comment, analysis and best practice direct to you

A commercial radio advert which suggested that people would be better off putting their money into property rather than keeping it in the bank has sparked a furore and landed an estate agent in trouble with the authorities.

The radio advert, approved by the Commercial Radio Companies Association prior to broadcast, was pulled following complaints.

Three complaints to the Advertising Standards Authority, (ASA), claimed that the advert was misleading because it did not make it clear that there were risks associated with investments. Two of the complainants believed the advert misleadingly presented buy-to-let as a low-risk investment.

Two of the complainants also challenged whether the advertiser was regulated by the Financial Services Authority (FSA) and, if not, whether the ad was suitable to be broadcast on radio.

The company responsible for the advert, Aldermartin Baines & Cuthbert (ABC), told the ASA that they offered many properties that reflected yields of between 7% and 12% but had been guided to suggest a 5% yield, which was very conservative and definitely deliverable. They claimed that they had also been very careful to ensure the ad spoke in very general terms and did not guarantee any return or yield. ABC also said that accountants and financial advisers had contacted them and commended them on the advert.

The company did not accept that the ad misleadingly presented Buy-To-Let as a low risk investment. They said that whilst the radio ad did not mention ‘low risk’, it focused on the issues of inflation eroding the value of money, either on deposit or as the debt of a mortgage, and that if a deal was considered risky, banks would not lend on it particularly in the current economic climate.

The Commercial Radio Companies Association said they were happy with the content of the advert as, in their view, it had been carefully worded so as not to misleadingly imply that investing in a buy-to-let property was low risk or risk-free.

They said the advert was for buy-to-let property promoted as a buy-to-let ‘investment’. They understood that buy-to-let property was outside the FSA’s remit because it was an ‘investment’ not felt to be in need of FSA regulation. They did not feel that banning such adverts from radio would be fair or proportionate.

The ASA considered the advert misleadingly presented buy-to-let investment as low risk and did not make clear the potential risks associated with such an investment. It stated that the risks involved were not limited to tenants not paying their rent and felt that the overall impression was that the advert presented buy-to-let investment as an alternative, or a preferable option, to saving.

The ASA noted that buy-to-let property was not regulated by the FSA and considered the advert to be promoting an investment and despite the CRCA’s comments, it upheld the public’s complaints and subsequently banned the broadcast of the radio advert .

The Property Ombudsman’s 2011 report, released last week, has shown a large increase in the number of complaints made against UK letting agents managing residential Buy To Let (BTL) properties in the Private Rented Sector, (PRS). .

The Association of Residential Letting Agents, (ARLA) have backed the UK Property Ombudsman, Christopher Hamer, in his call for proper regulation of the UK letting agency industry.

Mr Hamer’s report noted the need for a dedicated council that promotes the importance of using letting agents that are recognised members of either ARLA or the Property Ombudsman Scheme.

However, ARLA want legislation be put in place which demands the registration and licensing of all UK letting agents.

ARLA Operations Manager, Ian Potter, said “As an organisation that strives to achieve the best possible standards within the private rented sector, we are disappointed to see a rise in lettings complaints over the past year. That said, it comes as very little surprise given there is no national regulation in place to stop rogue agents setting up shop and taking advantage of what is a fragile market, 26% of complaints were against agents who did not belong to an Ombudsman scheme.”

Mr Potter then went on to recommend that tenants looking to enter into agreements with letting agents should, for their own protection, ensure they are members of the Property Ombudsman Scheme at the very least.

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