Leaders' technical and compliance director
We welcome the fact that, as of the 1st October, it is now compulsory for letting agents to join an approved redress scheme.
If an agent lets its landlords and tenants down badly, which happens far too frequently in this industry, they will now have an effective means of redress.
However, we are very concerned that two weeks after the legislation took effect, over 30 per cent of agents had not registered with one of the three approved redress schemes, according to research by the Property Redress Scheme (PRS).
It is also worrying that public awareness of the importance of choosing an agent that belongs to a redress scheme is low. The coming months will be a chance for us to see if this new legislation has any teeth; agents who have not registered with an approved redress scheme should be fined £5,000.
It will be interesting to see how effectively this is policed and how many will be brought to book for failing to comply.
Although compulsory redress is a positive step in improving standards in the industry, it falls well short of formal regulation of letting agents and will not stop inexperienced, unqualified or unscrupulous agents from setting up and practicing in the first place. Nor does it address the problem of agents without client money protection in place.
It’s all very well giving people an effective means of redress after they have been let down, and suffered the stress, worry and financial loss that often entails, but wouldn’t it be far better to prevent substandard agents from practicing in the first place so there is less cause for complaint?
To achieve this, the government needs to go much further and make it mandatory for agents to abide by an agreed code of conduct; be professionally qualified with a sound knowledge of the laws governing lettings; and to have Client Money Protection and Professional Indemnity insurance.
This really is the only effective way to protect the public from bad practice by agents.