Estate agents have today found out how they will be policed as the final report from the Regulation of Property Agents (ROPA) working group is made public.
It is the result of nine months of deliberations and seven meetings and will set out recommendations for the compulsory regulation of the industry.
It includes a new licencing regime for agents, a new regulator to police a code of practice for the industry and a requirement that both sales and letting agents must have a minimum qualification in order to work.
Also, all agents regardless of track record or experience will have to be qualified to work in what are to be called ‘reserved’ functions.
Lord Best (pictured, above), who chairs the working group, has said there may be a few exemptions, including senior staff at larger companies who do not directly get involved in day-to-day sales and lettings transaction activities.
“Regulation will be very good for the sector because it will be a higher barrier to entry,” MP and Hunters Chairman Kevin Holinrake said last week.
Lord Best has also urged all agents working in reserved functions but who do not hold any qualifications to start their studies as soon as possible.
The government is expected to begin framing the legislation as soon as the parliamentary timetable allows, which would see the new law go live in approximately a year’s time.
Estate agents reaction
“This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice,” Mark Hayward, Chief Executive, NAEA Propertymark and David Cox, Chief Executive, ARLA Propertymark said this morning in a joint statement.
“We have long called for Government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level).
“Following the extensive considerations by the working group, it is now for Government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all.”
Duncan Samuel, managing director, Gazeal, says: “With the introduction of regulation, qualifications and significant penalties for those who don’t comply, the reputations of agents will surely rise and this must be applauded. There will be an on-cost to companies but a weeding out of less than committed staff and perhaps older employees, who may not want to go through the trials of “exams” when they consider they have great experience.”
As part of RICS’ involvement in the working group, it is encouraging there to be a single, consolidated residential property code for residential property agents, in the form of an overarching high-level set of principles with additional sector specific requirements covering sales, lettings and block management.
“This follows the framework of many of RICS’ existing internationally adopted standards and guidance documents,” a spokesperson told The Negotiator.
“RICS now intends to build on its existing RICS led publications to produce a consolidated draft code for the Regulator to consider, and look forward to working closely with the profession, sector partners and consumer interest stakeholders as we develop this.”
Details from the report…
Estate agents licensing
“Appropriate qualifications and credentials, property agencies and qualifying agents should be required to hold and display a licence to practise from the new regulator. Before granting a licence, the new regulator should check that an agent has fulfilled its legal obligations (such as belonging to a redress scheme and submitting a copy of their annual audited accounts to the new regulator) – and that they have passed a fit-and-proper person test.”
Codes of Practice
“Codes of practice set out clear standards of behaviour. The Government has already committed to requiring that letting agents adhere to a code of practice, and we recommend that all property agents be required to do so. There should be a single, highlevel set of principles applicable to all property agents which is set in statute: the ‘overarching’ code. Then, underneath, ‘regulatory’ codes specific to various aspects of property agent practice, binding only on those providing these types of services.”
In the new regime, every property agency should be responsible for ensuring their staff are trained to the appropriate level and clear oversight arrangements are in place for junior staff. To ensure levels of qualification are appropriate yet proportionate, the working group recommend that licensed agents should be qualified to a minimum of level 3 of Ofqual’s Regulated Qualification Framework; company directors and managing agents should be qualified to a minimum of level 4 in most cases.”
“The new regulator should be funded by the firms and individuals it regulates – but Government should provide ‘seed corn’ funding to support its creation and help with its operation for an initial period. We recommend that it should be for the new regulator to determine whether professional bodies could, subject to an approval process, deliver some regulatory functions. No such delegation should be given without firm guarantees as to the professional body’s suitability.”