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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Welsh agents not displaying fees despite TPO enforcement letters
As the deadline for agents to get licensed with Rentsmart Wales passes, Welsh agents will be aware it is not the only organisation trying to police them. The Property Ombudsman late last month said Swansea was one of the Consumer Rights Act non-compliance hotspots after it discovered that agents in the city, along with those in Dorset, had the worst track record for displaying their fees both on their websites and in-branch, as the law now requires. Letters were sent out in a joint campaign with The Chartered Trading Standards Institutes to agents late last month warning them that non-compliant agents would be reported to local Trading Standards officers. But despite this, The Negotiator can reveal, five of the 18 letting agents with properties to let in the city still do not publish details of their fees on their websites. Earlier this month The Property Ombudsman Katrine Sporle (pictured) said up to 50% of agents in Swansea were not compliant and that they had until this Monday to remedy this. The letter has at least prompted some Swansea agents to get on board. Some 27% of them are non-compliant, an improvement on 50% and a sign that most agents across the UK…
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Welsh agents race to get licensed by mandatory RentSmart scheme
The deadline for registration with Rentsmart Wales has now passed and the hundreds of unlicensed agents who manage properties on behalf of landlords are now in breach of the Housing (Wales) Act 2014 but, we can reveal, won’t be prosecuted straight away. Rentsmart Wales, which is the Licensing Authority operating the scheme on behalf of the country’s 22 local authorities and run by Cardiff City Council, would appear to be creaking under the strain of late applications from landlords and agents. Its main contact number has been constantly engaged since the beginning of the week. As the deadline passed last night Rentsmart Wales says it had licensed 405 agents with 1,147 pending approval, and 3,945 landlords licensed with 9,133 pending approval. This is a significant improvement on the position at the end of October when 303 agents had been licensed and 576 were pending approval. Rentsmart also says 126,154 properties are now within the scheme or about 62% of the rental stock. But there is still a long way to go and the vast majority of agents and landlords are waiting for to be licensed. In light of these figures, Welsh Assembly Communities Secretary Carl Sargeant said last night that agents and…
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Bill banning tenant fees gives Minister room to exempt
The National Approved Letting Scheme (NALS) says that the proposed total ban on fees charged by letting agents to tenants may be subject to exemptions following an amendment to the Renters’ Rights Bill currently passing through the Lords. The amendment, which was published on Friday by the legislation’s sponsor, Baroness Grender (pictured, left), said that although a total ban on fees was being sought, she had introduced an amendment to to replace the previous prescriptive list that she says would have led to “new names for charges to get round it” and enable the Secretary of State to allow certain kinds of fees. “If evidence emerges of services in respect of which there is value to the tenant in charging a particular fee, this can be done”, she said. “I do not anticipate any such fees but my new amendment allows for the possibility, if concrete evidence was indeed found that a fee for a specific service would be in the best interest of the tenant in some way”. NALS believes this is significant development because it appears to recognise the legitimate charging of reasonable fees by letting agents setting up tenancies. “This amendment is a welcome one. NALS has long campaigned…
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BBC says 76% of tenants want lettings reform
The BBC has waded into the lettings reform debate after Victoria Derbyshire’s show on BBC 2 revealed that 76% of the 1,000+ people it polled want the government to regulate how homes are let and that 74% want caps set on private rents. Those interviewed by public policy research firm ComRes during early October on the show’s behalf this year were asked whether they supported the government regulating the ‘terms of lettings’ including agency fees, the drawing up of contracts and deposits, and it is this area of reform that garnered the greatest support. But there was less backing for two other suggestions. Only 69% supported rent rises being capped at the point of renewal and just 63% liked the idea of increasing the standard minimum letting period from six to 12 months. The show interviewed several unhappy tenants including a 28-year-old who said she paid agency fees of £500 when moving into her current one-bedroom flat in London, and who has moved home eight times at a cost of £5,000 over the past decade. The BBC’s Victoria Derbyshire website also quoted Alan Ward, chairman of the Residential Landlords Association (pictured), who said rent controls would be a “disaster” and that…
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Is conveyancing reform FINALLY going to happen?
The Conveyancing Association has published a White Paper that calls for a radical shake-up of the sales process in England and Wales after revealing that most estate agents are dissatisfied with its failings. Its White Paper is the result of extensive research and consultation among estate agents, lenders, solicitors, local and national government as well as surveyors, and suggests significant changes to almost every part of the conveyancing process as well as examination of the US and Scottish conveyancing systems, which the association considers to be better than ours in many ways. This includes suggested changes to aspects of the moving process that often frustrate agents, buyers and vendors alike including the non-binding nature of offers, the difficulties of chain management, mortgage finance, money laundering, local authority data, leaseholds, property information and contract completion. But the most sweeping of the Conveyancing Association reforms is to make offers a legal commitment tempered by a five-day cooling off period either through a reservation agreement or conditional contract. Other key suggestions in the document include: 1. Drawing up a central database of authenticated solicitors and agents to prevent fraud and money laundering, and also establish a secure portal to enable conveyancers, estate agents…
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Brighton to pilot smaller To Let boards
Brighton and Hove letting agents who use To Let boards to advertise properties within the city may soon have to reduce the size of their signs and only mount them flush on property walls if plans for a voluntary scheme are voted through today. The council is considering the scheme which will operate in the largely student Lewes Road corridor area of the city and is backed by The Brighton & Hove Estate Agents Association, which says it is “supportive of better management of residential letting agents boards and will continue to work with [council] officers to this end”. Brighton and Hove’s scheme will run for a year and be voluntary, but if unsuccessful the council says it will return to the Secretary of State to ask for a Regulation 7 Direction order to enforce stricter policing of To Let boards. In 2010 the council asked for 17 zones mostly in Conservation Areas to be considered for a Regulation 7 Direction and of these 12 were allowed, two partially allowed and three turned down. If the scheme gets the go-ahead then, following several months of consultation, it is likely to start in May 2017. Documentation from council officers (pictured) suggests…
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NALS Fair Fees Forum meets to head off a ban
The Fair Fees Forum set up last month by the National Approved Letting Scheme (NALS) met yesterday for the first time to consider the contentious issue of excessive fees charged to tenants by agents. Many in the industry are hoping the consensus it will built can head off an outright ban on tenant fees by replacing it with a fees cap. It was quite a meeting of minds. Every interest group was invited including those from the lettings industry, two of the redress schemes and the Department for Communities and Local Government. Representatives from trading standards and tenant groups such as Crisis and Shelter were also at the ‘first of its kind’ gathering, which NALS hopes will lead to consensus among the different groups on a ‘fair fees charter’. Agents represented at the meeting included Belvoir, Chestertons, Foxtons, Hunters, Leaders, Northwood, Portico, Savills, Spicerhaart and Winkworth, all of whom made up an ‘agent group’ at the day’s proceedings. The Residential Landlords Association also had representatives at the meeting. The agent group agreed unanimously on the need for ‘fair, justifiable and transparent fees’ and that excessive fees should be curbed. But they also made it clear that agents should be able to…
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Online-only agent’s ‘fee saving’ claims rejected by ASA
Online-only agent Housesimple.com’s claims that it can save London vendors thousands of pounds in fees compared to a traditional agent, and that it sells property three times faster than the average have been rejected by the Advertising Standard Authority (ASA) after a complaint about one of its London Underground posters. The ruling by the ASA today means online-only agents, who often promote ‘fee saving’ as a key part of their proposition, must be more careful about the claims they make in advertisements and be more clear about the data they use to substantiate their claims. Within the lengthy Housesimple ruling published today the ASA questions whether the data was London specific enough to substantiate the company’s claim that “we potentially save our average London client £18,764 in fees”. Also, the ASA says that anyone reading the advertisement “would think that the online-only agent’s average client selling an averagely-priced home in London would be able to save that figure on fees in comparison to competing agents,” it says. The ASA questions several aspects of the data used by Housesimple to substantiate its claims. This includes using just one competitor’s fee structure – Foxtons’ – to represent the average fees charged to London…
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Rent Smart Wales: 75% of letting agents not licensed yet
Three quarters of letting agents in Wales have not signed up to register with the country’s compulsory licensing scheme for agents and landlords, even though there is just two and a half weeks to go before it starts. The warning comes from a ‘concerned’ Association of Residential Letting Agents (ARLA) as the deadline looms for agents and landlords alike. “If landlords and agents find themselves unlicensed when the deadline arrives on 23rd November they will be unable to practice, so it’s important to act soon,” says David Cox, ARLA’s managing director. After the deadline Rent Smart Wales will responsible for policing the country’s rental market through a licensing system for agents that requires them to complete training and then get approved by the scheme. Landlords must also undertake the training if they wish to self-manage their properties, or alternatively use a licensed agent if they do not want to do the training. Also, anyone renting out a property in Wales must comply with the new regulation regardless of whether they live there or not. ARLA, which runs one of the Rent Smart Wales-approved training courses via the NFoPP Residential Letting and Property Management qualification (Levels 2,3 and 4) says it reckons…
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Are Swansea and Dorset agents worst at displaying letting fees?
The Property Ombudsman Katrine Sporle has revealed that the enforcement letters sent to TPO member agents in Dorset and Swansea last week requiring them to prove they are clearly displaying fees details targeted these areas first because it had found that 50% of letting agents within them were not compliant. Her comments came during her speech at The Negotiator Conference in London earlier this week. The letter (see link below) strikes a new and relatively aggressive tone compared to previous efforts and is a taste of what’s to come for agents elsewhere in the UK. TPO says the campaign is national and that the letters are being rolled out region by region in a phased approach. The next roll-out is due to be revealed. In a nutshell, the letter requires TPO members to provide an image of their fees on display in the branch and a web link and image to demonstrate where their fees are displayed on their website. “Agents in Swansea and Dorset have until 21st November to provide evidence and any agent that fails to do so will be referred to Trading Standards,” a TPO spokesperson told The Negotiator. The campaign is being conducted in partnership with the…
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