The Property Ombudsman has issued a reminder to all agents to ensure they have the correct redress membership to cover the work they undertake.  

This comes after a letting agent was issued with a £3,000 penalty by their council for not having redress membership to cover their residential leasehold management work, despite being a member of The Property Ombudsman for sales and lettings.

Following a complaint from a tenant at a residential block of flats – which the agent had managed for two years – the local authority discovered that the agent’s membership of TPO covered it for sales and lettings, commercial sales and lettings and some property management.

However the agency did not have redress for residential leasehold management, which would have required additional cover. The council took the view that the company was in breach of its legal obligations and issued a notice of intent.

The agent appealed to the First-tier Tribunal which concluded that there was insufficient evidence that the agent’s membership of TPO, in connection with property management, was inadequate to meet their obligations under the Order. 

The local authority then applied to the First-tier Tribunal for permission to appeal to the Upper Tribunal against the decision of the First-tier Tribunal in respect of the matter, which was refused.

The council then reviewed its application direct to the Upper Tribunal, which subsequently ruled there was ample evidence from which to determine the property management activities of the agent, and that it was a point of law that needed to be addressed and determined. 

The judge stated that “a company must be a member of a redress scheme for all works in which they are engaged, otherwise the whole process of a redress scheme is undermined”.

Property Ombudsman Katrine Sporle adds:“Local authorities have a duty to act where agents fail to register with an approved redress scheme, or fail to have the correct membership. 

“In this case, the agent believed they were covered for redress by their TPO membership for Sales and Lettings, and as a result did not receive the maximum fine of £5,000.  However, this should act as a timely warning to all agents to ensure you have appropriate redress membership to cover the work you carry out”.