Do you ever feel like the world is ganging up on you? Sales and letting agents are the whipping-boy of the property industry, they have to belong to an approved redress scheme and can be fined up to £5000 if they do not. The agency, seemingly, is always in the wrong, while buyers, sellers, landlords and tenants are – until proved otherwise – the wronged party.
The inference is that the agent is a ‘rogue’ but the number of ‘rogues’ is lower than you’d think.
One big issue with redress is that with so many ways to complain, and a rising awareness of our rights, complaining is very popular. The national press delight in reporting on heartbreaking stories of clients let down by rogue agents, always with the inference that it is a common problem, that estate and letting agents, are generally untrustworthy – patently unfair.
However, all three redress schemes: The Property Ombudsman, Property Redress Scheme and Ombudsman Services: Property, are still growing in membership and, as a result are reporting an increasing number of complaints. Business is brisk.
The Property Ombudsman (TPOS), for example, reported a 42 per cent year-on-year rise. However, TPOS has over 30,000 member offices and its latest report showed just over 8000 complaint enquiries, only 1375 of these resulted in ‘accepted claims’ taken forward for resolution, so while the increase in enquiries and complaints may sound bad, but the percentage of complaints against the number of members is much less worrying.
Agents though, do worry. They worry that while estate agency is regulated, there is still no proper regulation of the private rented sector, too many agents still don’t belong to a redress scheme – or do belong but ignore the Code of Practice. Alan Stewart, Director & Head of Residential Lettings & Management at Caxtons Chartered Surveyors is frustrated that there is still a lack of statutory regulation.
“In October 2014, The Property Ombudsman (TPO) issued a press release highlighting a sharp increase in the number of consumer complaints in the residential lettings sector. This was at the same time as the requirement for every agent to register with an approved redress scheme came into effect. It is is clear that the voluntary code of conduct amongst letting agencies is still not working and that landlords and tenants are left at risk. “The message, promoted by the industry, its regulators and fully compliant agents only to use regulated agencies does not seem to be reaching the consumer.
“It appears that some landlords and tenants are easily lured into a web of danger by agents who, on the surface, appear to be legitimate but are actually cavalier in their attitude to clients. Management fees may be a little cheaper, credit checks a bit less rigorous – and another unsuspecting bargain hunter is taken in.
“Organisations such as the ARLA and RICS and tenancy deposit schemes are all designed to protect the consumer. But landlords and tenants are still ignoring these safeguards and are being conned by unscrupulous letting agents.
“I am a strong advocate of formal regulation for the lettings industry. Honest traders would have nothing to fear but it might stop the majority of dishonest and unprincipled lone wolves and fully protect a naïve public.”
While the three redress schemes handle a wide range of complaints, the tenancy deposit schemes focus purely on the resolution of disputes about the return of tenants’ deposits. The largest of these is The Dispute Service (TDS) which has just published its latest Annual Review (17th September 2015).
TDS now protects 1,135,769 deposits with a value of £1.3bn in England and Wales, plus 91,751 in Scotland and 23,338 in Northern Ireland. The figure for England and Wales shows an increase of £100 million since March 2014 – £300 million more than the other providers. TDS also saw a substantial 25 per cent increase in deposit disputes to 11,900, which as the only scheme which allows landlords to raise disputes, is clearly, in part, owing to a continued growth in membership.
Fifty-three per cent of the received disputes were raised by tenants, 35 per cent by agents and 12 per cent by landlords.
The Property Ombudsman: £195 + VAT per office, plus a one off joining fee of £50+ VAT.
Property Redress Scheme (PRS): starts at £95 + VAT for each office, with extra charges levied if complaints are escalated to Stage 4.
Ombudsman Services: per company – approximately £150 +VAT. RICS members may find membership is included in their subscription fees.
The Dispute Service (TDS): from £9.25 + VAT per tenancy (discounts can apply)
MyDeposits: Variable fees.
Deposit Protection Service: £9.50 per deposit for registered agents for the insured scheme, custodial despoits are held free of charge.
Find out more:
The Property Ombudsman www.tpos.co.uk
Ombudsman Services www.ombudsman-services.org/property
Property Redress Scheme www.theprs.co.uk
The Dispute Service (TDS) www.tds.gb.com
Deposit Protection Service (DPS) www.depositprotection.com