The code sets out the standards to be met by anyone engaged in lettings including specific requirements around how clients’ money should be handled. It also makes it compulsory for businesses to have Client Money Protection and professional indemnity insurance.
In detail, the code covers:
- the standards of practice for those carrying out letting agency work;
- the handling of tenants’ and landlords’ money; and
- the professional indemnity arrangements to be kept in place.
The Code forms part of a broader regulatory framework for letting agents introduced by the Scottish Government, which includes:
- a mandatory register for letting agents with an associated ‘fit and proper’ person test;
- powers for Scottish Ministers to set training requirements that must be met before an applicant can be accepted on to the register;
- a means of redress for breaches of the Code to the First-tier Tribunal for landlords and tenants; and
- powers for Scottish Ministers to obtain information, and powers of inspection to help them monitor compliance.
ARLA Propertymark has published a useful compliance guide with three checklists for agents to ensure they conform with the new rules.
This specifies having written policies available on Terms of Business, Fee Notes, Rent Collection, Client Accounts, End Of Tenancy procedures, complaint handling and debt recovery.
There must be written processes covering Identify Checks, Proof of Ownership checks, Communications, Code of Practice, Reference Checks, Tenancy Agreements, Management of the Property, Key Handling and Staff Training.
Finally each agency must have for registration purposes, details of: Qualifications for the Principal, Partner or Director who has hands-on day to day responsibility for lettings; Continuing Professional Development requirements; Professional Indemnity Insurance, a separate client account, and Client Money Protection.