Property Ombudsman Christopher Hamer
Questions and Answers
What are complaint levels like at this moment on (a) sales and (b) lettings?
Workload so far this year is around 25% up on last year. The larger proportion of new cases are now on lettings (which represent around 60% of our workload) but to my surprise it seems sale disputes have never really tailed off, even though the market has been difficult. It is worth taking into account, however, that there are quite a few more sale agents in membership than before the market began to stagnate.
A small proportion of work also comes from TPO-registered firms in the commercial sector, through chattels and via residential leasehold management.
Can you say something about your organisation – eg, number of staff, number of case adjudicators, numbers of subscribers and how they break down, annual turnover, costs and what happens to any profit made?
We have 65 staff, including a team of 18 adjudication case officers and a team of five attempting what we call ‘early resolution’ where the firm has made an offer and the complaint might be deemed as having little chance of success so we are trying to get the parties to agree a settlement without needing to conduct a full review.
There are around ten people manning the inquiry line for consumers and we have general office functions including finance, HR and a dedicated team to manage membership inquiries from new and existing firms.
Total membership is now around 9,000 firms and 22,000 branches, and there’s a £2.4m budget to operate the service we provide. We are a not-for-profit organisation so any surplus is reinvested to manage the increased calls and caseload we experience year-on-year. We do not charge a case fee for the individual disputes referred to me.
What is your view on the CLG committee report calling for regulation of letting agents?
The CLG report lent another voice to the many who are calling for some form of regulation in the lettings sector. I gave evidence to the committee and it was clear the direction they would take, but I am unsure how the comments they have made will further the debate given the current government’s clear stance of opposition to regulation. With that in mind, it is difficult to say where the report goes from here.
Why has TPO not made it compulsory for all letting agents to have CMP and PI, when it has been described as ‘crucial’ for landlords and tenants? When do you think you will do so?
We are strongly encouraging firms to take up CMP cover either by joining one of the trade associations or through one of the market offerings. I have no view on what route firms should take or on the comparative forms of cover available, but I think we need to see what requirements (and restrictions) DCLG have for approving redress schemes for letting agents and we hope that might become more apparent by the end of the year.
Certainly I think it is desirable for consumers to be offered the maximum protection, and in any case around 84% of TPO agents have CMP cover in place already, and it is a membership requirement that they have PI cover.
Can you explain what has happened to the OFT and the withdrawal of use of logos? What is likely to happen in future?
The OFT stated some time ago that it would withdraw from the Code approval process but gave no clear timeline. Everyone in the market was well aware that April 2014 was to be the demise of OFT in its current form.
However, the market and OFT Code sponsors were caught out by the unusually (for OFT) sudden decision in January 2013 to withdraw the scheme at the end of March. I know it caught many people out – not least us having ordered a year’s supply of stationery complete with OFT logos. Hence we negotiated a transitional arrangement and we’ve been working closely with the Trading Standards Institute (TSI) which has replaced the OFT to operate the Consumer Code Approval Scheme.
I’m pleased to confirm that TPO has become the first property organisation to have a Code of Practice approved by TSI. TPO’s involvement has boosted the number of approved traders under the Consumer Code Approval Scheme from 14,745 to 26,530 – making TPO the largest organisation to be accredited by the scheme.
The TPO Sales Code is the tenth Code of Practice approved by the scheme since it launched this year.
I feel it is important that the TPO is seen as being independently approved by a credible organisation and has successfully passed the rigorous examination and approval for consumer-focused codes.
TPO sales agents can now promote their association with TSI and demonstrate how they offer the highest level of consumer protection for buyers and sellers.
We are in active discussions with TSI to achieve scheme approval for the Lettings Code of Practice.
The Government is to make membership of a redress scheme compulsory for all letting agents once it has satisfied itself there are sufficient redress schemes in the marketplace. There are, effectively, two. Do you think the Government will decide this is enough?
There is a point to emphasise here – the recent changes about redress apply to England only. This is in contrast to the requirements for sales agents, which is UK-wide. So whilst the government approach is good news, it is only partial good news and means inconsistency of treatment for agents operating in Scotland, NI and Wales.
In my view, more than one scheme is a daft idea. Fragmentation and/or competition in redress is an odd principle to follow. That said, the two existing schemes should provide the government with sufficient coverage. Any more schemes – and let’s say they do it on a commercial basis – with all the issues that come with commercialism, would potentially just add to the confusion.
The two existing schemes work closely together in the interest of consumers, to avoid confusion and ensure consistent decision-making.
There has been some criticism of the TPO’s own title from our readers, as it suggests it is THE ombudsman when in fact it is a company supplying ombudsman services. What do you say to this?
I am the Property Ombudsman. That is my job title and that properly describes the role I have. The Property Ombudsman Limited is the legal entity which provides the scheme. I do not feel my title is at all confusing.
You often say that TPO is not a regulator. Conversely, NAEA, ARLA, RICS and NALS usually describe themselves as regulators – as in “agents regulated by …” and their many references to “unregulated” agents. Do you think this is confusing?
I am not a regulator – that is not what Ombudsman schemes do within the property industry or in other market sectors. Regulation is the setting of rules by which a business must operate and under which is an enforcement mechanism to ensure compliance. As Property Ombudsman I look at individual cases and the circumstances of these individual cases and I decide a resolution to the matter. My awards are for compensation payable to the complainant if it is appropriate. They are not fines or penalties as imposed by a regulator.
Trade bodies have rules and a code of conduct for their members against which they will take disciplinary action if those rules are breached – so they do act in a regulatory mode.
What is the latest on the Advertising Standards Authority stipulation that all letting agent adverts must also give charges to tenants, and when do you expect to be able to issue advice? Has TPO ever had complaints on this, as the Advertising Standards Authority did?
The ASA ruling on disclosure of tenant fees is ‘converted’ to a code of practice by the Committee on Advertising Practice. They have been talking to property portals about how this ruling can be met and an interim solution for the provision of a link to promote a fees page has been put forward. There is more to come on this, and as soon as the approach is settled I will be able to issue guidance to agents registered with TPO.
Last year 20% of my lettings workload concerned fees and charges, of which the majority of complaints were from landlords, not tenants.
Will TPO ever publish the names of agents who are complained about, in view of actions taken by some other ombudsmen?
I am not entirely in favour of publicising a ‘league table’. This approach is not necessarily going to improve compliance or raise standards in the industry.
For example, a large firm conducting many sales/lettings will inevitably get more complaints as they represent a larger percentage of the market.
We also need to take into account that a large number of complaints are resolved before they are brought to TPO so a league table of Ombudsman complaints is only part of a larger picture.
With that in mind, I think it needs a lot of thought as to how such an approach can provide meaningful and realistic information to the consumer.
That said, we do proactively name agents referred to our Disciplinary and Standards Committee where we feel it is of public interest for consumers to be aware of an agent’s expulsion from the TPO scheme.
Anything else you would like to cover?
We’re on the cusp of a huge amount of change in the industry and I want to contribute to those debates.
We work closely with consumer groups, trade bodies and central Government to add meaningful insight to matters affecting the property industry.
Our involvement with the London Rental Standard is a great example of how the lettings sector is ready for change as it sets out a set of voluntary minimum standards that the Mayor expects from landlords, managing agents and letting agents that operate in London’s private rented sector.
Beyond that, we are all awaiting news of how the letting agent redress schemes will be approved, so there are interesting times ahead.
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