Member Of A Property Redress Scheme?

The private lettings agency sector unfortunately has its share of unscrupulous agents but things are set to change.

In an effort to raise standards across the industry, from 1^st October 2014 it will be mandatory for every lettings agent to be registered with an ombudsman or redress scheme. Previously, it has not been compulsory for lettings agents to provide any kind of compensation to either landlords or tenants, allowing unethical companies to get away with providing a poor service.

Every lettings agent must now join one of the three ombudsman schemes which operate in the private lettings sector, namely the Property Ombudsman, the Ombudsman Services Property or the Property Redress Scheme.

What does it mean for landlords?

At present approximately 3.8 million properties in Britain are privately rented, representing 16.5% of all homes.  In London, the proportion of privately rented homes is around one third.

The new law will provide landlords with independent redress which may result in the following action being ordered to be taken by the lettings agent in question:-

• An apology or explanation of their actions.
• Practical steps to rectify the situation.
• Reimbursement of financial costs or losses incurred by landlords.
• Additional compensation for distress and time taken to raise the complaint.

Financial compensation is capped at £25,000.

Lettings agents who fail to comply may also be expelled from the scheme for misconduct.

Best practice voluntary code

The new scheme comes hard on the heels of a recently launched ‘best practice’ voluntary code of conduct for the private rental sector, a government initiative facilitated by the Royal Institution of Charter Surveyors and backed by 17 leading industry bodies.  This code again aims to protect tenants and landlords from unethical lettings agents but is not compulsory.