The news last month that the Government will now require all letting agents to sign up to a mandatory redress scheme is a real positive for both agents and the tenants who have had little recourse but the courts when it comes to escalating complaints for meaningful redress.
This was an absolutely essential move in order to repair the reputation of the lettings sector. While I fully believe the vast majority of agents run transparent and fair operations, there are always going to be those whose overarching objective is personal financial reward rather than delivering quality service. It is time all industry stakeholders made a concerted effort to expel these bad apples from our market.
Of course we know that a large number of letting agents are already members of one of the redress schemes, be it The Property Ombudsman, Ombudsman Services: Property or The Property Redress Scheme, but according to Government records, there are still over 3,000 agents left to join. Their clients will now be offered an independent investigation into outstanding complaints, which will help to weed out those outfits operating outside the perimeter of regulatory reach.
Agency firms dealing in residential sales have been working within these requirements for some time now, having already been asked to join and comply with a redress scheme. While some of the 3,000 lettings firms might baulk at the increased cost this will impose on their business, it is absolutely vital that we operate a level playing field across the whole industry, in terms of consumer protection. As far as a client is concerned, the important point is that they will now have access to an independent body that will look into their complaint rather than the head of the firm they are complaining against, and this hugely important benefit is available to them free of charge.
This move really can't come soon enough given the record level of complaints recently announced by the Property Ombudsman. Last year, it saw a 23% rise in complaints against sales and lettings agents compared to 2012, with over 16,000 received. The anticipation is that this will continue to grow during the course of this year with the Ombudsman himself suggesting he is already seeing larger numbers of complaints from both landlords and tenants.
Clearly, the next major question is whether this is one step further along the road to complete statutory regulation of estate and lettings agents, with the consensus appearing to be that it could well be. Having said this, it appears that the Government is willing to allow the industry a period of time to get its own house in order through self-regulation, because we know only too well from the regulation by statute of the mortgage market, for instance, that this results in huge costs which ultimately fall to the consumer. Many commentators also question whether the UK's myriad of regulatory bodies have the capacity, experience or inclination to take on the job and therefore, this is likely to be a decision made by a future government rather than anytime soon.
What we do know is that this move goes a long way towards our sector improving its reputation and the consequent reward of greater consumer confidence in the services we offer.
*Rob Clifford is Chief Executive of CENTURY 21 UK
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Comments
I would also like to add that a trivial complaint also adds a mountain of paperwork and a lot of unnecessary stress to an already busy office. Even when a 'complaint' is thrown out there is no comeback for the agent against the landlord or the tenant.
A fairer system would be for the complainant to be charged a fee (refundable if the case is won) that could be awarded to the agent if the case is lost. This would result in claims only being brought in genuine cases rather than being the result of an angry email from someone who has got the hump if not all the facts.
The problem with the ombudsman scheme is that it is too easy to complain. We have been hit a couple of times on minor issues that could have easily been resolved. We are an independent agent with just one branch on the high street of a small town and value our good reputation but we have to tread so very carefully so as to not upset any of our tenants. God forbid that we should ask them to pay their rent on time or keep the property clean for fear of a retaliatory claim for harassment. We have been fined by these little Hitlers (they talk to you like s**t) because a landlord complained that the property wasn't left in the condition they would have liked at the end of a tenancy. This was despite providing evidence of inspections showing that there were no issues. The damage was done in the latter weeks of the tenancy for reasons unknown. If you make it easy for people to complain the numbers will of course go up. This does not mean that the industry is getting worse!