Sean's Blog: November 14

It has been an interesting week in the lettings sector, but overall a good one.  The Property Redress  Scheme continues to grow, with an average of ten new applications a day.

This proves that that the number of agents out there is larger than some people in the industry originally thought, but also that there is still education and publicity to be done.

On this note I started the week by appearing on television, having been invited to address the issue of awareness of the law by London Live. Whilst this concentrated on the Capital, it did highlight that after a month a number a councils and most tenants are not up to speed on the legislation.

Whilst not being complacent, I am not surprised, as these things tend to be a slow burn and take a while to get in to the public’s consciousness.  With regard to the local authorities, many are rigorously enforcing the scheme and are regularly contacting us for confirmation of whether particular agents are members.  Given that the penalty is £5000, many Councils are eager to get extra cash into their coffers but are also finding that where agents are willfully avoiding this scheme that other problems are coming out of the woodwork when they investigate them.

Personally, I also think that the industry can do its bit and make Councils aware of agents that are sneaking under the radar. It is not doing the Council’s job for them; it is protecting your brand and your reputation, as well as helping level up the playing field as the non-compliant agent uses the “saving” from breaking the law to undercut his legitimate neighbours.  

The Property Redress Scheme will continue to promote the scheme and engage with local authorities to spread the word and ensure the scheme is a success.

We also are urging our members to ensure that they inform both their landlords and tenants of the existence of the redress scheme. Far from being a negative thing for your business, it will greatly enhance it. With our layered escalation complaints process, it will be highly unlikely that there will be a situation where you will have to pay an additional fee for a complaint, but your customer has the reassurance that when they complain, there is not a “take it or leave it” response from their agent.

Make sure you put that you are a member of PRS in your management agreements, have a published complaints process that includes PRS (it only has to be half page long!), make the customer aware of the PRS as the next stage when you send them your final e-mail or letter and make sure that you display the window sticker, certificate of membership and put the logo and link on your website. (It  is part of your T&Cs with us).

This leads very neatly into events happening in the industry this week. It is clear we are going into an election year and the property industry will be a key battle ground for the competing parties.

It was very interesting therefore that Parliament was busy with debating major changes to the law that will have a big impact on the industry. The key areas that came to a head this week were the attempt to outlaw fees, the call for client money protection (CMP) to be made mandatory and the outlawing of retaliatory evictions. 

The amendment to make charging tenants agency fees was voted down as was the amendment to make CMP mandatory.  The government, however recognized the importance of both these issues and will move legislation forward to make fees transparent and avoid double charges. Also surprisingly but welcome by me, they are making it mandatory for agents to tell their customers if they have or have not got CMP and to inform them that they are a member of a redress scheme and which one.

On the issue of fees, agents are in the last chance saloon and will need to get their house in order if they want to continue to charge legitimate fees to tenants. As an ombudsman, I will rigorously rule against unclear, unfair and disproportionate fees. I will not have to enforce the law but expect no quarter if you double charge or hide your fees.  

On CMP, the industry united to back the amendment to make this mandatory.  Whilst the amendment was defeated,  it put the issue clearly on the agenda and the government amendment to make agents disclose that they have signed up to a scheme, will start to ensure a differentiation emerges between the safe and less secure agents.

I supported the call for CMP to be made mandatory, however until there is more choice, accessibility and a consistency of cover, it would have been a difficult law to enforce. The move to make agents  inform their customers of the importance of this cover will mean that market pressure will start to make the industry safer. Over to you, to make it work, otherwise compulsion is around the corner.

Remember, the PRS gives an incentive to have CMP by offering discounted complaints fees and also backing CM Protect (www.cmprotect.co.uk) as an alternative to having to join a trade association..

As I write this, parliament is debating and will vote on the abolition of mandatory evictions. Whatever the result of this, the response of the industry will be very carefully scrutinised. The perception, reputation and trust in the industry are at stake with this issue as well as all the other changes that you will have to come up to speed with.  Keep informed and ahead of the game.

As we enter in to the festive season, I wish you the happiest of Christmas’s and a very prosperous 2015.