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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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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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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.

A new report is urgently calling on the Government to regulate residential Letting Agents to the same standards as Estate Agents and reckons that UK tenants are being ripped off by cowboy agents in the booming PRS rental market.

The Resolution Foundation, an independent think tank which focuses on lower income groups, says tenants are paying significant upfront costs, whilst agents’ fees are variable and there is a lack of transparency around charges.

The organisation carried out a mystery shopping exercise of 25 unnamed letting agents in three cities – London, Cheltenham and Manchester. It found the range and type of fees charged varied enormously.

For example, administrative fees ranged from £95 to £375. Total upfront costs (including deposit, admin fees and rent in advance) for a one-bed property in London were £2,166, around double those charged in Manchester (£1,028) and Gloucester (£1,094).

Just two of the letting agents displayed the costs of renting on their websites and many renters only discovered charges after they had decided to rent a property.

Average deposits for a one-bed property ranged from £487 in Manchester to £1,099 in London.

Many tenants reported difficulties when moving within the private rented sector as they had to hand over a new deposit before they had got their old one back.

Resolution says its findings are particularly relevant given the growing number of households forced into renting for the long term. In 1988 only 14% of low to middle income households aged under 35 were living in rented accommodation, but by 2008 it had tripled to 41%.

The report points out that unlike estate agents, letting agents are unregulated and there is no compulsory membership of an ombudsman service. The report is also backed by the Property Ombudsman.

The Resolution Foundation is calling for:

  • Letting agents to be regulated to the same level as estate agents, so that unscrupulous agents can be banned;
  • All agents to be signed up to an ombudsman service giving redress to tenants;
  • The ombudsmen’s codes of practice to stipulate that agents must display all charges to tenants and landlords on their website and in adverts in a way that is easily comparable across agents;
  • The Government to consider ways to make it easier for tenants to transfer deposits between landlords when they re-tender for the tenancy deposit protection schemes in 2012.

Vidhya Alakeson, Resolution’s director of research, said: “The lack of regulation in the exploding private rented market is of growing concern. We need more transparency so tenants at least know what fees they’re facing and to help create a more competitive market. Given that an increasing number of families have no option other than to rent long term, we need to question why letting agents are not regulated to the same degree as estate agents.”

Christopher Hamer, The Property Ombudsman, said: “This report emphasises the growing importance of the lettings sector for people seeking a home to live in. The Government does not see regulation of the sector as a priority and I, therefore, welcome the recommendation of this report that all letting agents should be required to be registered with an ombudsman scheme so that, at least, landlords or tenants can gain redress where they have been disadvantaged by an agent. Providing clarity and transparency of fees is also very important. As more and more people become tenants or landlords, these measures would assist them in fully understanding the commitments they are taking on and enable them to challenge the agent if anything is unclear.”

Ian Potter, operations manager at ARLA, said: “It’s vital that consumers have full confidence in lettings agents, and the industry must respond to their concerns about bad practice. That’s why in the absence of regulation, we developed our own licensing scheme. All licensed ARLA member letting agents must be covered by a client money protection scheme and hold professional indemnity insurance – which means consumers are protected against negligence. They must follow our strict codes of conduct and have a certain level of training. Ultimately this means that, should something go wrong, there are protection mechanisms in place. We would therefore always advise that consumers use an ARLA-licensed lettings agent. Fees will vary from region to region and will depend on the specific services offered by an agent. However, for landlords and tenants alike it is important to obtain clear, written information from an agent about exactly which services their fee includes – and whether there are likely to be any further costs in the future. This means that, should a landlord or tenant feel the fees were unclear, they can lodge a complaint with ARLA or utilise the Ombudsman Scheme membership, which all ARLA licensed agents are required to hold.”

Legal 4 Landlords spokesman Sim Sekhon said “Landlords who choose Letting Agents to manage their properties need to ensure that the agents act in a professional manner at all times, working positively for both the landlord and tenant. Landlords can take out insurance to protect their property from a bad tenant but there is currently no protection from a bad lettings agent “.

The full report is called Renting in the Dark: creating a lettings market that works for tenants, by Louisa Darian. It forms part of the Resolution Foundation’s programme of work on housing

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No regulation for UK letting agents

UK Gov Refuse To Regulate Letting Agents

The UK Government has said it does not believe that all letting agents should be made to have client money protection insurance and belong to an Ombudsman scheme, despite being warned of a spate of crooked letting agents.

In response to a letter written by Peter Bolton King, the Chief Executive of the Association of Residential Letting Agents, (ARLA), the Con-Dem Government confirmed its stance in a reply from the Department of Communities and Local Government.

Mr Bolton King had written to the UK Housing Minister, Grant Shapps, pointing out some of the recent cases involvinging a number of letting agents who went out of business taking money belonging to landlords and tenants with them.

Many property professionals have called for a suitable Ombudsman scheme, even though the Government has repeatedly said it does not want to regulate letting agents, despite some ongoing and notorious cases of theft and fraud.

The Government response said:

“As you are aware, the lettings industry is not subject to statutory regulation; however, it is in the interests of the industry to maintain consumer confidence in the services provided and we look to organisations such as NFoPP [National Federation of Property Professionals, of which ARLA is a part] to take a lead in that work. As part of this, the Department continues to explore with its industry partners how best to counter poor practice by letting and managing agents without resorting to regulation. As you will also be aware, between a third and a half of agents belong to voluntary schemes which ensure that members have the right protections for consumers in place. We always suggest that anyone considering using a letting agent checks to see that they belong to a trade body or accreditation scheme such as the Association of Residential Letting Agents, (ARLA), the National Association of Estate Agents, (NAEA) the National Approved Letting Scheme, (NALS) or the Royal Institution of Chartered Surveyors, (RICS). In view of the existence of well developed voluntary regulation in the sector, Ministers do not believe that regulation is the answer at present. But they are keeping a watching brief, and information about poor practice is always useful in that context.”

Mr Bolton King said: “While I am pleased that they continue to understand the benefits of using one of our members, they are clearly not yet swayed by the argument that all lettings agents should have Client Money Protection insurance and belong to a redress scheme.”

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