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Written by rosalind renshaw

As the sell-out ARLA annual conference opens this morning, the organisation has come up with a proposal for the mandatory regulation of the entire residential property sector.

ARLA is calling for all landlords and all types of agents to be regulated, saying that the public perception of letting agents is of “wheeler dealers” dominating the sector.

The document spells out why ARLA thinks regulation is necessary, saying that “it beggars belief” that the energy industry is regulated and yet the property sector as a whole, and the lettings industry in particular, is not. People, it says, spend less on gas than they do on rent.

It says: “The majority of letting agents are professionals, working in the interests of their clients and consumers. However, the sector is tarnished by the conduct of a minority of agents who fail to adhere to basic standards.

“Failure to protect client money, mis-advertising of properties, failure to properly maintain leased accommodation and provide a safe environment for tenants – all these issues must be addressed.”

It goes on: “ARLA believes that the best way to tackle rogue agents and promote professionalism and basic standards in the letting sector is to introduce a system of mandatory regulation for those working in the letting, sales and management of property.”

ARLA refers to its own licensing scheme for members, which it says provides the most effective protection for consumers available. However, it points out that not all agents are members: “There are many agencies that are failing consumers – and the time has come to do something about them.”

The document sets out the huge growth in the private rented sector, and the number of bodies and schemes operating within it. But it says this makes the sector complex and difficult for consumers to understand.

Instead, it suggests a system where a single industry regulator would oversee and audit “accredited” industry bodies across lettings, sales, management and landlord sectors.

All agents and all landlords would, by law, have to belong to one of these accredited bodies.

For example:

NAEA and the RICS for estate agents;


ARLA and the NAEA for sales agents;

Association of Residential Managing Agents for managing agents;

and the National Landlords Association and Residential Landlords Association for landlords.

All these accredited bodies would run their own licensing schemes, with the exception of the landlord bodies which would operate registers of landlords.

Licensing would be based on qualifications, provision of client money protection, holding of professional indemnity insurance, external auditing of client accounts, and a code of practice.

The landlord bodies would merely promote best practice, along with operating registers. However, they too would be answerable to the industry regulator, and it would be compulsory for all landlords to register.

ARLA suggests that the Property Ombudsman would be the most appropriate body to take this role of industry regulator – although the Ombudsman himself, Christopher Hamer, has always been at pains to point out that he is not a regulator, but runs a redress scheme.

ARLA also proposes that only one government department should be ultimately responsible for the property sector. It suggests the Department for Communities and Local Government.

Alan Ward, chairman of the Residential Landlords Association, said that the RLA supports regulation for agents, but that there needed to be a distinction between commercial letting agents and landlords who manage a few other properties as well as those in their own portfolios.

He said: “They may develop into commercial letting agents, but to make their operation illegal would be to stifle the development of small business.

“The report also refers to the regulation of landlords – on which it is very loose.

“Proper accreditation is required with standards for property and management – but this would only be acceptable if the system operated like building control, where independent approved inspectors (operating, for example, like FENSA and Gas Safe competent persons) are able to certify, which would allow councils to focus on enforcement.”

Comments

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    ARLA has the best wheeler dealer on its board - ask him about his employment tribunals and spreading invoices across clients

    • 28 March 2013 11:42 AM
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    Stop brown nosing the politicians Ian and start listening to your members.

    • 27 March 2013 17:31 PM
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    "The public perception of letting agents is of 'wheeler dealers" dominating the sector"
    I have to say that isn't my experience, so could I respectfully ask if this rogue Agent /Wheeler dealer plague is confined to certain areas?
    Is it, for example, that London and the South East is overrun people operating as Agents but who pay little regard for the duty of care owed to landlord clients and tenants or is this ‘phenomenon’ actually one of increased cut price competition; Estate Agents venturing into Lettings to keep their businesses afloat or entrepreneurial Joe Publics setting up to fill a gap in the low end of the market?
    Shouldn’t the actual problem be qualified and quantified before applying broad brush regulation that fixes a short term issue that possibly exists in one or two geographic location’s? I am quite sure those in the thick of the battle will wonder why I can’t see the issues they are facing, but as the issues are not being reported in any meaningful detail (no names ever mentioned little detail of the wrong) and with only limited coverage available to those not on the newsletter or distribution lists of the trade bodies it is difficult from a distance to understand the problem.
    I fully support the call for a single regulator and have put quite a lot of time thinking about the extent of regulation, my conclusion is that the governance of the industry as a whole should be reviewed, with the role of every stakeholder assessed before meaningful regulation can be formulated and a regulator appointed.

    • 27 March 2013 08:46 AM
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    More rules, more groups to join, more restrictions for companies! Stuff Arla!

    Busy fff busy body brown nosing traffic warden failures at Arla !!!!

    Better to regulate builders. I had one take 60k off me!

    • 26 March 2013 21:36 PM
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    Hallelujah! Finally ARLA talks some sense. Hilarious that they can't bring themselves to mention NALS though! When will they realise that there are some issues over which the 2 bodies share some common ground.

    • 26 March 2013 21:18 PM
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    NAL's, RIC's, ARLA or NAEA? Seems to me that with too many regulators offering regulation, companies will simply choose the next one down the ladder to regulate them.

    Perhaps ARLA are suggesting RIC's stick to surveying, NAEA stick to Estate Agenting and NAL's get confined to history.

    • 26 March 2013 14:43 PM
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    Electricity is regulated because it is a restricted market.

    To make that comment show a comment lack of understanding of free market economics.

    Please someone start a trade body run for its members.

    We do not need more red tape and regulators.

    • 26 March 2013 11:32 AM
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    As Groucho Marx almost said: "I wouldn't join a club that wanted me as a member". How much more appropriate this comment would be if the club in question actually wanted to force me to join......

    Someone, somewhere, get a grip. All regulated, some regulated, non regulated, whatever.

    • 26 March 2013 10:58 AM
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    Can not these silly bgrs see that in any society or club there will always be people that break the rules. They will do it no matter what if it is convenient or profitable or it gains some advantage. Putting all letting people into a club will not make one iota of difference.

    This country must already have tens of thousands of laws which basically say, "Thou shalt not steal". Enforce these laws against tenants, agents and landlords and all will sort itself out. In these days we believe prison is a waste of time so the punishments need to be big fines which will be sufficient to put offenders out of business.

    • 26 March 2013 10:49 AM
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    Anybody or organisation that actually ASKS to be regulated by the Government is out of their minds!
    ARLA - for goodness sake do what you should have been doing for the last ten years or so - above all else - PROMOTE & ADVERTISE THE EXPERIENCE AND QUALIFICATIONS ETC. OF YOUR MEMBERS.
    Or give up, because you are not politicians or a consumer organisation, you are supposed to be doing your best for your members - asking for another level of control over them is not doing so.!

    • 26 March 2013 10:16 AM
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    In theory I entirely support the move towards regulation of the letting industry with a view to raising standards. However, this is pointless if the schemes are not going to regularly inspect their member agents to ensure best practice. This move will simply penalise small agents like us who work to the very highest standards and cannot afford to pay out for meaningless membership costs.

    • 26 March 2013 09:33 AM
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    Please stop... Just stop with this now. Your making enough noise for it to be heard in parliament, ARLA.

    What really gets my goat more than anything though is how many bloody schemes and licensing bodies there are out there.. Not surprising that most of their board of directors are are normally made up of the corporate lettings business director/owners.

    There are laws in place already for doing something 'against the law' ... Why do we need someone else below the law, sitting on a throne, telling us that we should adhear to it? Its like having that goody too shoes idiot at school that copies everything the teacher has just said and then repeats it because they know they are right. On top of that they are going to charge us for the wonderful privellage.. This is insane, bugger off ARLA. Please. Get a real job, don't just spout the law and then charge us for it! Rant over.

    • 26 March 2013 08:48 AM
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