Changes are coming to the letting and property management market the government have decided to regulate how these services operate. For many years the letting and property management services have been allowed to operate without mandatory regulation. The government feel there is a need for a nationally recognised qualification in order to practice and have made moves to put this in place.
A Code of Practice with standards:
- Transparency of potential conflicts of interest;
- Transparency of current and future financial commitments to which clients are agreeing;
- Service charges;
- Communication and customer service;
- Handling of clients’ money; and Dispute resolution
Areas of concern
- The ease at which anyone can set up as a property agent and to address the minimum requirements
- Abuse of fees, less ethical agents have been increasing exponentially the managing costs
- The letting process needs to be transparent and ongoing costs need to be clear and available
- The consumer must be able to switch the letting agent if they prove to be inefficient or break terms of the contract
- Letting agents and property management services are not always a member of any regulatory group
Client Money Protection Schemes (CMP)
Not all agents are using CMP and in doing so neither landlord or consumer have protection. It is felt CMP schemes need to be regulated and an agent must make clear if they are a member of a scheme and what scheme that is. This will be something that a County Council will have control over and failure to comply will be a civil offence.
The Way Forward
- A single Code of Practice for lettings and managing agents. There will be distinct sections for different areas of practice e.g. lettings vs. managing agents. Professional bodies with more stringent requirements than the single Code will be allowed
- The establishment of an Independent Regulator that owns the Code of Practice
- A nationally recognised qualification to practice as a Letting Agent or Managing Agent, including sole traders. It will be the firms responsibility to evidence this to the Regulator
- Continuing Professional Development of services while agents are in operation
- A Working Group will be set up, on how to implement the proposals
- Required to be a member of an approved professional body will be examined by the Working Group
- If required criminal sanctions for agents who practice despite being banned
- Allowing leaseholders to switch Managing Agents
- Simplify the Right To Manage application process
We are proud to be members of ARMA & RICS
This is just a short summary of the regulations and concerns, for the full picture you can read more with the links below.