Lettings agents still major problem for Ombudsman

Since the end of June last year, inquiries regarding lettings have gone up by 44% while those regarding sales have fallen by almost a third (30%) although they are showing a slight upward trend once more.

"This is precisely what I forecast as the property market switched emphasis from sales to lettings during the current slowdown," Hamer said.

"Inquiries over lettings disputes now far outstrip those for sales and this is one of the principal reasons for asking the Office of Fair Trading to ratify The Property Ombudsman Lettings Code of Practice under its Consumer Codes Approval Scheme.

"We see this as the first step towards the time when all lettings agents must be legally required to sign up for a redress scheme.

"Such a requirement already applies to residential sales agents and as a result more than 10,400 sales offices were registered with my scheme at the end of June, the end date for my current report.

"In addition, my jurisdiction also covers 6255 lettings offices as their operators have signed up voluntarily to The Property Ombudsman scheme and this means that 807 disputes that have arisen with lettings agents between April 1 and June 30 will fall within my jurisdiction.

"But that still leaves a significant number of the 1446 inquiries outside my scheme, which clearly flags up that consumers have a potentially very large problem. We are trying to help these people with advice wherever we can.

"My message to consumers in the lettings market is that they should only use agents who are covered by The Property Ombudsman scheme and are therefore following the standards in our Lettings Code of Practice."

Hamer also says in the introduction to his report that estate agents must take much greater care when explaining fee structures to clients and ensure that clients are aware of what they are signing up to.

He states that while he will not re-write contracts that are quite lawful, where there is evidence of deliberately induced confusion in the mind of the consumer he will find in the consumer’s favour and make an award that compensates them for their loss.

Hamer said: "Do not assume that clients have understood the detail of what is presented. Although they have committed themselves to a contract it is in my view best practice to highlight and specifically emphasise the relevant information.

"It will, for certain, reduce the number of complaints arising."

In the report, Hamer cites a case where an agent sold a house for £220,000 but charged a flat fee worked out against an asking price of £300,000, the original amount he had recommended and which was £50,000 more than two other agents had advised.

The agent offered the complainant £500 in recompense but Hamer judged this insufficient and awarded £1304 against the agent, resulting in the complainant paying commission to the agent according to his sliding scale for a £220,000 sale.

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