New regulations are to be published “within days” by the Government, which will require all letting and managing agents to join an approved redress scheme.
A new Code of Practice setting standards for the management of property in the private rented sector is also to be published, and could become statutory.
Additionally, a Tenants’ Charter is being published and goes out to consultation, and a timetable given for the introduction of a new model tenancy agreement giving tenancies of three or more years.
Local councils will also be expected to step up their activities within the private rented sector.
They are to be given guidance on how to protect private tenants from illegal eviction, how to push for harsher penalties for housing offences, and told to plan for new private rented developments, including on their own land.
The announcements were made yesterday in a package of measures flagged up by Secretary of State Eric Pickles as heralding “a brighter future for hard-working tenants”.
But the measures have come under fire for being too soft, and not going far enough.
They do not require letting agents to have Client Money Protection insurance, and do not give powers to the Office of Fair Trading to ban letting agents. Nor will letting agents have to have Professional Indemnity insurance. Nor is there any crackdown on fees charged by agents and no mention of regulation of letting agents.
As such, Pickles has rejected some key proposals made this summer by the Communities and Local Government committee report into the private rented sector.
Clive Betts, the MP who chairs the CLG committee, said: “It is disappointing that the Government does not see fit to crack down on cowboy letting agents and their rip-off fees and charges.”
Ian Potter, managing director of ARLA, said he too was “disappointed” that there was no mention of insurances, or the way agents handle client money, or of regulation.
He said: “We will continue to call on the Government to introduce these powers to ensure that we drive out bad practice in the sector once and for all.”
Richard Lambert, of the National Landlords Association, said: “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.”
Peter Bolton King, of the RICS, said the Government needs to go one step further, and called for a consistent national regulation scheme of letting agents.
Nonetheless, Pickles called his plans “ambitious”, saying that the UK’s nine million private tenants would get a better deal as a result.
In particular, said Pickles, tenants would be able to:
• avoid hidden fees from unscrupulous letting agents
• get proper protection from rogue landlords
• request long-term rental deals that cut costs and provide stability for their family
• feel confident to demand better standards and management of their property by landlords
Pickles said: “The private rented market is a vital asset to this country. It’s an important option for the millions of people who want a bit more flexibility, or to simply save up for a deposit so they can buy a place of their own.
“This government is on the side of hard-working people and the last thing we want to do is hurt tenants and kill 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.
“Today’s proposals will raise the quality and choice of rental accommodation, and sharpen the tools available to tenants and councils so we can root out the cowboys and rogue operators in the sector.
“These measures will also give tenants the know-how to demand longer-term tenancies that cut costs and meet their needs – and when things do go wrong, the confidence to take action without fear of eviction or harassment.”
Pickles also announced a summit for mortgage lenders to consider the issue of longer tenancy agreement. He also announced a review of how tenants can complain to councils about private rented accommodation.
The review will also consider requiring landlords to repay rent where a property is found to have serious hazards. This could include allowing councils to recoup housing benefit.
Pickles made his announcement in tandem with another, from the OFT, which yesterday launched a major consultation into how letting agents and landlords must comply with a raft of legislation.
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Comments
As stated, better that there is redress than not. At least it gives tenants some teeth and may make those agents who ignore unhappy customers think twice. It's also better for agents fed up with customers who have no complaint. but wont let things drop. It works both ways,
Nevertheless, Mr Pickles has failed to address protecting tenants who fall victim to those intent on wrong doing.
I also agree that all agents should have a level playing field of common protection. Being 'new' doesn't mean you should use this as an excuse to opt out of basic consumer protection.
@All a tad embarrassing!
Compulsory membership of a redress scheme can only be good. To say otherwise is just silly. Its far from perfect, but at least is gives some redress,
No one objects to enthusiastic newcomers. The lack of experience or qualification makes them no more rogue than any other new staff in any established agency - unless that firm has no protection through PI, CMP, & regulation. Often these newcomers save money by not investing in anything which protects the consumer. I have even seen them use AST's lifted off the internet which are old of date and flawed.
There have to be some basic standards.
Compulsory membership of a redress scheme is a good start is it Eric? Please explain how a £15 fee is any kind of meaningfull barrier to roguery.
Redress and CMP are the PRS King's new clothes; the panecea to cure all wrongs in the industry? Sorry to disagreee but starting with Eric pickles at the top of the tree filtering down through the full frange of stakeholders involved with the industry there is a deluded naivety about how to make things better if in fact that is the real intention.
Until the problems are identified, quantified and qualified there is simply no sense in trying to solve a problem that is at present purely anecdotal.
Whilst I am sure rogue agents do exist somebody really ought to define what constitutes 'rogue'. A bloke setting up a cheap commission lettings operation might be a real pain to their competition and their lack of experience or qualifications an insulting frustration by in reality lettings requires very little skill or qualification. Their lack of experience or qualification makes them no more rogue than any other new staff in any established agency. It is unfair to paint competion as rogue when they are simply entreprenurial new entrants into the industry.
I agree with PR that spurious claims are the number 1 issue affecting letting agents with each claim taking about four hours to deal with.
I would suggest that if a tenant wants to dispute a claim that they have to put up a £500 bond.
If they then fail to achieve 5% of the disputed amount then they will lose their bond which will be split 50/50 between the landlord (to pass on to the letting agent) and TDS.
I also think that letting agent software suppliers need to do something about the amount of time it takes to lodge the deposits.
We can pay 500 odd landlords and update their statements in twenty minutes but to lodge 60 tenants deposits and send out the prescribed information takes three days.
More & more legislation being proposed but it is the ENFORCEMENT of current legislation that is one of the main problems. If errant agents could see what happened to other it would be a good start..
The overriding issue here remains that the CLG are planning to bolt the stable door long after Dobbin has had his head in the trough.
Redress aside, its the consumer protection issue which is of concern, not independent redress. This is important, but secondary to agents businesses being built on solid foundations with consistent standards
The first post on here covers it better so no point in repeating the message. This isn't about TPOS - its about the public.
PR states
"However, agents need to be protected as much as tenants. When a tenant makes a spurious and unjustified claim via TPOS, Deposit Protection or whoever, the agent has to collate and manage a lot of information, costing time and therefore money."
If you haven't covered this within your Terms of Business then it's your own fault. You need to cover such eventualities as it's not the agent's fault the tenant has made a spurious claim and the landlord would have to deal with it had they not engaged an agent. Time is definitely money so make sure you get paid, and it shouldn't be within your monthly charges parameter either.
I think people are straying from the point - this isn't intended as a critique of TPOS or redress schemes (not to be confused with deposit disputes which are another issue altogether)
The point EW made hits the nail on the head. We need to protect - not just focus on dealing with redress. It comes across as half hearted - a compromise of apathy for political headlines,
@ JT "For The Property Ombudsman you need to provide copy of PI cover but CMP is not required" - NOT YET!!
It will be once the new TPOS backed CMP policy starts being flogged. That will be interesting
It seems to me that TPOS is becoming a regulator despite denials that this is so as well as a lobbyist and political commentator.
Other Ombudsman schemes remain silent.
I wonder whether TPOS is planning to float on the stock market... ;)
@eromallid
For The Proprty Ombudsman you need to provide copy of PI cover but CMP is not required.
The more protection that can be offered, the better for everyone.
However, agents need to be protected as much as tenants. When a tenant makes a spurious and unjustified claim via TPOS, Deposit Protection or whoever, the agent has to collate and manage a lot of information, costing time and therefore money.
No matter what anyone says, TPOS is slightly biased towards the tenant/vendor/buyer. DPS on the other hand is TOTALLY biased in favour of the tenant. We have only had to use their arbitration service three times (and have won the case on each occasion) but the bias shown towards the tenant is breath-taking.
If the tenant wins the claim then the agent is at a financial loss. If the agent wins then they are still at a financial loss for the time, effort, stress and abuse they've had to endure. It is expensive and time-consuming for us to prove that the tenant was just a scum bag who was trying their luck.
This system needs to change; if the tenant wins then the agent/landlord should suffer a penanlty, but for this to be fair the tenant should face an equal penalty if the agent wins.
I know some liberal do-gooders out there will take the 'poor little tenant' line, claiming that they can't afford to take a financial risk with making such claims, but if the system changes to make agents even more accountable but without changing this inherent bias, then we will have no choice but to increase our costs to the tenant and landlord up-front.
Let's be clear here. The vast majority of agents are not dodgy and do not illegally evict tenants. It is ok having a compulsory redress scheme but any complaint has to be dealt with fairly and thrown out if found to have no foundation. In my experience tenants generally complain when they want to get back at the agent because the agent has had the audacity to chase them again for unpaid rent or about the condition of the property. So mush has been said about the nasty agent/landlord but nothing is being done about the growing number of rogue tenants!
Isn't it the case that you can only join a redress scheme if you have PII & CMP?
If that is the case then the redress schemes become the industry 'regulators'. I am not at all sure as to the extent of their due diligence and monitoring though?
EW is right. The worst rogues could be precluded from trading as they may not meet the criteria to actually get PI and CMP insurance - as such this would not only help the consumer, but would act as a filter.
All people such as TPOS can do is order funds are repaid and add £50 for inconvenience. Any dodgy agent who has pinched a few hundred grand wont care.
I agree with Eric (Walker, not Pickles!!)
No point in redress without fundamental protection.
Compulsory membership of a redress scheme is a good start. however I am disappointed that there is no requirement for CMP or Pi Insurance. As such this does not protect the consumer. Redress is too late when an agent has gone bust or pinched funds. All a redress scheme can do in such circumstances is state the obvious and order that the money is returned.
Likewise, I believe that any fee or charge not disclosed and flagged before the commencement of the tenancy should a) be invalid, and b) it should be made unlawful for an agent to attempt to make any such charge and the fee disclosure document should clearly state this.
This newss a small step in the right direction, but the key is in protecting the consumer not giving them the mechanism to complain when its often too late.