Regulation & Law
News articles looking at national legislation and local regulation and the application of law to the residential property industry.
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29% of landlords may drop their agent after tenant fees ban, says research
The likely consequences of the tenant fees ban for agents has been highlighted by research from UKALA among landlords. Carried out in partnership with the National Landlords Association among nearly 700 landlords, the research reveals that 71% of those who use a letting agent will continue to do so even if their costs rise following a tenant fees ban, although this also suggests that nearly a third of landlords will not. Nearly 80% of landlords said they expect agent to increase their fees after a ban, while only 9% said they’d switch to self-managing their properties after it comes in. UKALA says it is critical of the ban, and argues that “affordability in the private-rented sector cannot be addressed by preventing agents from charging for legitimate business services, and that the costs will eventually be passed on to tenants in the long-term,” it says. The research also suggests that 40% of landlords are likely to increase rents to cover the additional costs, while just 9% are prepared to pay the extra costs themselves. “UKALA agents strive to provide a premium service which represents excellent value for money, but the ban on tenant fees could leave hundreds of professional businesses with…
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Martyn Gerrard laments “overreaction” to ad that ASA wants taken down
An estate agency asked to remove a poster advert from an Underground Station in north London by the Advertising Standards Authority (ASA) following a complaint from the public has hit out against the decision. David Smith (pictured, below), who is Marketing and Compliance Director at 14-branch Martyn Gerrard, says that although in the “strict interpretation of the rules” the ASA code means the complainant is technically correct, he wonders is this is “really the sort of image they had in mind when they devised their rules? I very much doubt it”. “We were quite surprised to receive the letter from the ASA,” he told The Negotiator. “This particular advert was on an underground station platform and had been up for over a year.” The ASA rules say an advert can’t condone or encourage an unsafe practice or show anything that will result in physical, mental or moral harm. The ASA wrote via email to Martyn Gerrard on 10th March and in his reply to them David agreed to take the advert down, as we reported yesterday, but highlighted his disappointment with the request. He wondered if the complaint may have come from a “vexatious competitor agent” rather than a concerned…
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Tell customers why you’ve got a pink window badge, says TPO
Estate agents have had a new sticker to display on their branch windows for a while now. But do any of their clients realise why? Probably not. Which is why The Property Ombudsman (TPO) which is backing a national campaign to persuade businesses to promote their membership of the Consumer Code Approval Schemes (CCAS). The schemes, which include 43,000 businesses across many sectors including property, cover consumer spending of some £51 billion every year. If you’re a TPO member then you’ll soon be getting the window stickers, as all members of the ombudsman are enrolled in the scheme through their membership. The initiative is part of a week-long campaign launched by Baroness Crawley on Monday to persuade consumers to chooseagents who are TPO members and who therefore adhere to its Code of Conduct, which is one of a family of codes covered by the CCAS scheme. Codes of conduct TPO is the only one of the three ombudsman schemes to have its own codes approved by CCAS, having achieved accreditation in 2005 via the Chartered Trading Standards Institute (CTSI). “TPO has been supportive of the Consumer Codes Approval Scheme since it was first launched by Office of Fair Trading many years ago,”…
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High profile agent withdraws London Underground ad after complaint
Sales and letting agent Martyn Gerrard has withdrawn a London Underground poster ad after a complaint from a member of the public. The ad, pictured below, which to some people might seem like a feel-good and innocent piece of advertising creative, featured two children – a boy at the top of a flight of stairs and a girl sliding down the stairs in a washing basket while wearing a cycling helmet and swimming goggles. The strapline for the advert was “oMG…that was a good move…Making your next big move more enjoyable”. The north London agent, which has 14 branches and was established in 1964, re-branded recently and has been advertising in the capital to support this with a series of ads featuring goggle-wearing children enjoying ‘good moves’ – including a girl clutching a toy rocket. But the latest one clearly didn’t amuse one member of the public. Complaint They complained to the Advertising Standards Authority (ASA) that the poster ad was likely to “condone or encourage children to copy an unsafe practice and whether the ad was also likely to be responsible”. “We contacted the advertiser about the concerns raised and they agreed to remove the ad from circulation,” an…
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CMA rejects industry forum’s call for letting fees ban review
The NALS-organised industry Fair Fees Forum has had its request for a letting fees ban review rejected by the Competition and Markets Authority (CMA), which says there is too little time to complete it. “Given the pivotal role played by the private rented sector, we feel this decision is a missed opportunity to review the way the sector works to deliver the best outcome for all concerned,” says Isobel Thompson (pictured, below), Chief Executive of the National Approved Letting Scheme (NALS). Irreparable damage The CMA decision not to get involved comes despite the Forum warning that great care must be taken not to cause “irreparable damage” to this part of the private rented sector by rushing through a ban without “fully considering the impact on the sector.” The news may surprise many in the industry who had been led to believe that after the soon-to-be published results of the consultation – and given both the pressures on parliamentary time and the need for primary legislations to impose a ban – it was unlikely that one would be introduced until next year. This would have given the CMA plenty of time to review the details of the ban. “This is disappointing news for the…
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Mother and daughter property fraud pair jailed
A mother and daughter team who helped a Dubai-based gang make a false £1.2 million application for a bridging loan by taking the identity of a deceased Kensington landlady have been jailed for property fraud. 31-year-old Laylah De Cruz (pictured) is to serve a five-year sentence and 62-year-old mother Dianne Moorcroft a three year term following a trial at Southwark Crown Court, during which the pair denied the fraud. The two were part of a gang, the rest of whom are still being sought, who identified a rental property belonging to a deceased landlady and then rented it using false papers. After this, with the help of her daughter, Moorcroft changed her name by Deed Poll to the landlady’s name. She later put the property on Eagle Place in Kensington on the market and, posing as the millionaire but actually deceased owner of the property, subsequently applied for a bridging loan of £1.2 million, which she was granted. The funds were then transferred to Dubai and have since not been traced. Moorcroft was arrested at her Blackpool home in February 2015 while De Cruz was arrested on her return from Dubai, where she lived as an expat, in May 2016. Suspicious…
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New money laundering watchdog launched
The government has announced that a new watchdog is to be launched early next year to oversee the UK’s Anti Money Laundering (AML) regulations, which are due to become law this June. Called the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), its job will be to tackle potential weaknesses in the supervision of estate agents that criminals may be exploiting. The new anti money laundering watchdog will be paid for by what the HM Treasury calls ‘supervisors’; the big accountancy, law and other trade and regulatory bodies. It will be based at the HQ of the Financial Conduct Authority in London. AML rules The latest version of the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 is designed to bring the UK in line with international standards and include “robust new standards of supervision”. They introduce new responsibilities for agents covering when and how they must carry out enhanced due diligence on customers, and how they carry out risk assessments to work out if their business is vulnerable to money laundering attempts. The regulation in particular ask agents to look more carefully at transfer of funds, a problem highlighted in January when a criminal gang based in London…
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Rogue letting agent jailed after stealing holding deposits worth £15,000
A “thoroughly dishonest” rogue letting agent in Croydon, South London has been jailed for failing to pay back holding deposits often for the same property and totalling £15,000 following a two-week trial. Thirugnanaselvam Damayantharan, also known as Mr Damo, was sentenced to 19 months in jail for the offences, which included taking multiple deposits for the same property, letting properties he had no authority to do so and failing to return deposits when tenancies fell through, despite being through no fault of the tenant. At the court hearing the letting agent denied two counts of fraudulently trading as two companies – See Own Properties and My Lawn Estates – over the past six years, although the unreturned holdings deposits related to 33 properties. See Own Properties, which is still trading but the annual accounts for which are overdue, is registered at a Regus office facility in central Croydon (pictured, left). My Lawn Estates, which advertised on Rightmove but has now been removed but is still listed as ‘active’ at Companies House, was expelled from The Property Ombudsman in 2015 for two years. During the case, which was brought by Croydon Council Trading Standards, the court heard that Damayantharan, who was…
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Landlord Action says rogue tenants are targetting free-to-list websites
Campaigning group Landlord Action has published an extraordinary warning about free-to-list advertising sites, suggesting that landlords should not to use them to find tenants because they are being targeted by rogue tenants. The comments follow last night’s Channel 5 TV show Nightmare Tenants, Slum Landlords featuring Landlord Action founder Paul Shamplina. In the episode aired last night at 9pm, Shamplina met London landlord Vicki McNaught who he says used a well-known free-to-list site to find a tenant for her property, although this is not mentioned in the episode. She says she subsequently regretted it after the tenant stopped paying his rent soon after moving in. Landlord Action says Vikki (pictured, left) listed her property with the site because it was a cheaper alternative to using a letting agent. She says that initially she was “delighted” to secure a professional tenant with a public-school background and a City job, and his girlfriend. Vikki, who was owed more than £3,000 by her errant tenant, says that people like this are more likely to target free-to-list sites because they hope they will be subjected to fewer checks. “In the future, we’d always go through an agent – although even this has no guarantee. It’s…
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Agent agrees to withdraw ‘knocking copy’ ad after ASA investigation
An agent in Andover, Hampshire has been investigated by the advertising watchdog the ASA for making competitor comparisons within a flyer. Bournes Town & Country, which has two branches in and around Andover, circulated a flyer featuring a picture of a house previously marketed by a competitor, Austin Hawk, that Bournes Town & Country had subsequently sold. The text on the flyer compared the listings of the two firms, one saying “3 viewings no sale time wasted” while the other “12 viewings sold STC success”. Additional text then said “originally advertised with your agent then swapped to Bournes”, suggesting the flyers were circulated to homes marketed by Austin Hawk at the time. The complainant about the flyer said there were a variety of factors which could impact on whether a house sold or not and challenged wither the comparison in the ad was misleading. The Advertising Standards Authority (ASA) contacted Bournes Town & Country about the complaint and it “agreed not to make competitor comparisons which included details that customers cannot independently verify in the future”, the watchdog said. It also said it had “received assurance from the advertiser they would make their future advertising compliant with the advertising rules”. The…
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