Honourable and personal residential letting experts

22Jul Government to regulate letting and managing agents

Government to regulate letting and managing agents

The government has published proposals for far-reaching changes to the way letting agents are regulated, trained and licensed in response to findings by the Regulation of Property Agents working party, set up last year by the Ministry of Housing Communities and Local Government.

This is music to our ears!  At last some common sense prevails and rogue agencies will be driven out of the mainstream spotlight.  As an already fully qualified and regulated agency, it is a joy to know that we will be recognised for our hard work and commitment, and not undercut by agencies without an ounce of knowledge, who risk their landlord’s reputations without a blink of the eye!

Key recommendations are:

  1. All people who carry out property agency work are regulated (including auctioneers, rent-to-rent firms, property guardian providers, international property agents, and online agents) but will not extend to property portals like Rightmove and Zoopla nor to the Airbnb-style short-let sector.
  2. A new regulator should be established and run with regard to general principles of good governance, including independence, openness and transparency, accountability, integrity, clarity of purpose and effectiveness.
  3. To confirm 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.
  4. Codes of Practice will set out clear standards of behaviour. There should be a single, high- level set of principles applicable to all property agents which is set in the 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. All agents must act with honesty and integrity; ensure all staff are appropriately qualified; declare conflicts of interest, and have an effective complaints procedure in place.
  5. 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.
  6. The new regulator should be given a statutory duty to ensure transparency of leaseholder and freeholder charges and should work with the sector (property agents, developers and consumers) to draw up the detail of the regulatory codes to underpin this aim as it applies to property agents.
  7. The new regulator would have a range of options for enforcement action according to the seriousness of the infringement and how regularly it has occurred. These options should range from agreeing to remedial actions and issuing warnings up to the revocation of licences and prosecutions for unlicensed practice. There should be a system of flexible working between the new regulator and Trading Standards teams, and the new regulator should set out guidance clarifying their own and Trading Standards’ roles with regards to enforcement action to avoid duplication.

The entire recommendations document is tightly packed with detail and will become a major talking point for the industry. You can read it for yourself here.