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Ombudsman urges better lettings standards

The Ombudsman acknowledges that it is not current Government policy to consider regulation of letting agents but his report highlights several areas where simple changes could be made to provide greater protection for consumers and, in doing so, support those letting agents who are already providing a service in accordance with agreed industry standards.

"Consumer awareness is the key," Hamer said. "Knowledgeable landlords already check if an agent has a separate account for client money and has signed up to a redress scheme, before allowing them to market their property.

"However, landlords who are new to lettings, for example, will no doubt be attracted by lower fees and may not enquire what protection the agent can provide both them and their tenants should problems later occur. Agents who protect client money and follow the TPO Code of Practice can give landlords this reassurance. If all landlords ensured that their agent had these credentials, I firmly believe that tenants and landlords would see the benefits of using agents who adhere to important standards of business and stories concerning ‘rogue agents’, with which we are all familiar, would dramatically reduce."

To achieve this level of consumer awareness, the Ombudsman is proposing the formation of an industry council to develop and promote overall standards within the lettings sector. The council would also seek to ensure that consumers understand why they should avoid letting agents who refuse to follow a set of industry standards, such as the TPO Code of Practice, and who do not seek out membership of recognised industry bodies such as ARLA, NALS, or RICS.

"Getting that message across can only be achieved by such bodies pulling together, and bringing in a consumer stakeholder contribution, so that it is made obvious to consumers which firms remain in the minority, intent on operating outside of industry approved standards,"  said Mr Hamer, who also points to a potentially quicker way of achieving this objective.

"The Consumers, Estate Agents and Redress Act 2007 (CEARA) required all sales agents to register with a redress scheme. Since then, my office has seen a year upon year improvement in standards relating to sales agents. If letting agents were compelled by law to register with a redress scheme, I believe that standards across the lettings industry would improve in a similar way."

The law governing estate agents is more than 30 years old and at the time it was enacted, it did not take into account the lettings sector. In the Ombudsman’s view, that law could be easily redefined to embrace all forms of tenancy.

The Ombudsman said: "The consequences of redefining just one phrase ‘interest in land’ would mean that the obligations of CEARA would become applicable to every agent operating a lettings business, forcing them to join an approved redress scheme and, of course, obliging them to act in accordance with a Code of Practice."

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2 thoughts on “Ombudsman urges better lettings standards

  1. Major Landlord says:

    As a landlord with multiple properties, I am all in favour of incraesed regulation on letting agents. There are many bad ones around, who give atrocious service both to tenants and landlords. Often, the biggest are the worst.

    But is the Ombudsman really the best body to police the industry? They have so far taken 16 weeks to handle one complaint I have made against a large agent involving poor management and malpractice leading to thousands of pounds worth of damage. I have had several letters apologising for the delay, but they have not even allocated a case officer yet. It makes me think the whole thing is just a sham to persuade landlords that members of the TPO scheme are somehow more trustworthy than others. In reality, they are not brought to account even in serious cases like this. I am now poised to take private action, as the TPO has utterly failed in its duty.

  2. Established Multi-award winning letting agent says:

    At this moment in time I am seriously considering withdrawing my TPO membership. I own a London based estate and lettings agency- I started the company in 2004 having worked for companies big and small in London and was appalled at how the rental sector was treated…both Tenants and Landlords. Since then I have worked hard to build a company with an excellent reputation- which we have. We are one of the most positively, independently reviewed letting agents in the country and were last year recognised with 5 nominations at 3 separate industry awards (of which we won 1)- all of which related to our letting services and standards of customer service.

    We had 1 complaint filed by very unreasonable Tenants. I won’t go in to the details (my report to TPO on this tenancy and are dealings with the Tenants was over 10 pages long) however on submitting the report I actually felt an immense amount of pride of how we had handled the matter, protected the landlord and dealt reasonably with the Tenants. To give an idea of their demands- they didn’t like economy7 heating so wanted the Landlord to replace the entire heating system (even though there was nothing wrong with it)!

    We engaged in continuous and ongoing communication with the Tenants who kept on raising the same issues. We attended mutiple times sending 3 different contractors- all who agreed on our position. We then gave the tenants the option to arrange their own survey/contractor and (if upheld) we would reimburse them- needless to say they never did this. They even went as far as saying that the minor issue had the flat inhabitable and, at the very least, demanded a considerable rent reduction. Hysterically, they later asked to extend their tenancy!?

    Despite all of this and the fact that we made our position very clear and advised the Tenants that, without a new issue or being able to contradict our or the client’s position, we would no longer acknowledge or respond to any communications regarding the issue- we have now been found ‘guilty’ of poor communication with the Tenants and fined £50. The money is irrelevant (the TPO have ignored the fact that we gave the Tenants the option to vacate early with no penatly or costs- this would have been around £400 under the standard terms of our tenancy agreement)- it is the fact that, should the Tenants accept this ‘judgement’ my company will now have a ‘black mark’ against our name on the TPO register.

    I am utterly furious. This scheme is there to re-assure Tenants & Landlords that they will get handled fairly and that their is compensation when this is not the case however for us members that pay membership- we are not given the same protection from unruly Tenants. I have disputed their decision however as ‘no new evidence has arisen’ (they wouldn’t accept the request to extend their tenancy as new evidence) they have stuck to their position.

    I am angry and frustrated and left feeling that unruly agents that don’t take voluntary regulatory membership are not penalised (unless someone takes a matter to court) and honest agents that try to make a stand for high standards can be penalised for doing their job and protecting their Landlord.

    It makes me even more angry to read a comment like the one from Major Landlord above where the TPO is highly ineffective when a major situation has occured resulting in ££££s of damage. Shocking, absolutely shocking. The more I work with and deal with any regulators the more I see them for the money making businesses they are rather than effective, fair regulators.

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