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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.

UKALA Has Serious Concerns About Immigration Bill

UKALA Has Serious Concerns About Immigration Bill

Immigration Bill Concerns Highlighted To Government

The UK Association of Letting Agents (UKLA) has voiced some serious concerns over the introduction of the Government’s new Immigration Bill.

The concerns were raised by UKALA Executive Caroline Kenny to Parliament’s Public Bill Committee after the UKLA were called to give evidence on behalf of letting agents.
Ms Kenny used the opportunity to bring letting agents’ doubts over the enforcement and responsibilities of the proposals to the immigration minister’s attention highlighting the UKLA’s concerns over restricting access to all but low risk tenants.

The UKLA were asked to give evidence to the Public Bill Committee following lengthy discussions with the Department for Communities and Local Government (DCLG) and the Home Office.

UK Association of Letting AgentsSpeaking after the evidence session, Caroline Kenny commented, “Whilst letting agents are well equipped to carry our checks, and do so on behalf of landlord clients every day, the legal requirement to periodically monitor and report on the immigration status of tenants could affect their ability to conduct business and the safety of their staff. UKALA is deeply concerned that the Bill’s requirements will further restrict access to housing for people from outside of the UK, or with non-standard requirements. Many areas of the UK have very competitive lettings markets and it is entirely conceivable that landlords will instruct agents to favour those tenants they perceive as ‘low risk’. UKALA agrees that landlords and letting agents should act responsibly to ensure that only tenants with the proper permission to reside in the UK are granted new private tenancies. However, we believe it is not appropriate to make housing professionals responsible for policing country’s borders.”

The views shared by many UK landlords with rental portfolios within the private rented sector are more defined, they don’t want the added responsibility of having to carry out these checks on tenants immigration status, they are in the business of renting out property to tenants that can afford the rent, not being unpaid agents of the UK Border Agency performing personal vetting services.

Tenant referencing services are going to become a vital mainstay of all UK PRS landlords’ operational procedures if they are to stay within the confines of the Government new proposals, this creates business opportunities for service providers.

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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Superstrike Case Causes Confusion

Superstrike Case Causes Confusion

Lord Justice Lloyd delivered judgement on an appeal from Wandsworth County Court for the case of Superstrike Ltd v Marino Rodrigues on the 14th June 2013 and since then conflicting advice has been offered by different landlord associations.

The Residential Landlords Association (RLA) told its members that they will be issuing updates shortly, after they have sought advice from its deposit protection partner the Tenancy Deposit Scheme (TDS).

By contrast, the National Landlords Association (NLA), who have business links with MyDeposits and the UK Association of Letting Agents (UKALA) have condemned the speculation and online reporting of the case.

The NLA issued advice to members stating that the Superstrike case also only relates to landlords within a particular timeframe, who used Section 21 notices. In reality the case will have little effect on landlords and insist that the ruling only pertains to tenancies started before April 6, 2007, and which have subsequently become periodic.

The NLA are discussing the matter with officials responsible for tenancy deposit protection (TDP) legislation within the Department for Communities and Local Government (DCLG) and legal professionals.

It is important to understand that appeal judges only consider the case presented to them, not a similar set of circumstances, or a variation on a theme.

The precedent they set is therefore only applicable to cases subject to the same set of circumstances. This fact is crucial in this instance as the case of Superstrike Ltd v Rodrigues is not representative of all landlords or private tenancies.

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NLA and UKALA Call For Clarity Over Tenancy Deposit Protection Law

NLA and UKALA Call For Clarity Over Tenancy Deposit Protection Law

NLA And UKALA Call For Clarity Over
Tenancy Deposit Protection Law

NLA / UKALA press release:

The National Landlords Association (NLA) and the UK Association of Letting Agents (UKALA) are jointly calling for clarity amid speculation about the impact of the recent Court of Appeal judgement in the case between Superstrike Ltd and Marino Rodrigues.

The judgement of 14 June 2013 is the latest in a long line of appeal cases to cast doubt on landlords’ responsibility to protect tenants’ deposits.

In the case of Superstrike Ltd and Marino Rodrigues, the Lord Justice Lloyd’s conclusion has raised significant questions about the status of long-term periodic tenancies which began prior to the introduction of tenancy deposit protection (TDP).

Richard Lambert, CEO of the NLA, said: “It is understandable that landlords are concerned about this case, and the potential impact it could have on those who find that they have unintentionally failed to comply with tenancy deposit protection legislation as a result of Lord Justice Lloyd’s ruling. However, they must remember that this judgement only applies to a very specific set of circumstances, meaning that most landlords will be unaffected. Although it is likely to affect relatively few tenancies, the NLA’s real concern in this matter is that, once again, professional landlords, following government guidance on how to comply with the law, have been caught out by the unintended consequences of the Housing Act 2004. The Government must act swiftly to reassure the industry that law-abiding landlords will not face sanctions as a result of this new interpretation of the rules. We’ve written to the Housing Minister calling on him to take urgent action to re-assert the spirit of the law on tenancy deposit protection and restore fairness to the system which was designed to ensure it.”

Caroline Kenny, UKALA Chief Executive, said: “UKALA is troubled that once again tenancy deposit protection rules appear to have been thrown into disarray by the Court of Appeal. Landlords and their agents simply trying to understand and comply with the law will be rightly disillusioned by yet another reconsideration of ‘the right way to protect a deposit’. We hope to see this matter taken to the Supreme Court so that clarity can be achieved once and for all. In the meantime, the industry is in desperate need of guidance from the Government about how to treat affected deposits.”

For the first time in UK history the Government have decided to regulate the UK lettings and property management industry

UK Lettings & Property Management Agents are to be regulated for the first time

UK Lettings & Property Management Agents are to be regulated for the first time

Lettings and property management agents in the UK are set to face government regulation, after decisions were made in the House of Commons to take action to clamp down on unscrupulous behaviour, according to reports.

The new rules will see amendments to the Enterprise and Regulatory Reform Bill, will mean that all lettings and management agents will be required to sign up to a redress scheme allowing consumers to report unresolved disputes to an ombudsman, who will have the authority to ensure that agents repay any tenants and landlords they may have deceived.

The changes have come as welcome news to many property professionals, after calls from many corners for letting agents to be monitored and checked.

The Royal Institute of Chartered Surveyors (RICS) extremely happy with the regulation changes, because they were at the forefront of the campaign for regulation.

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