Considering ROPA, Lord Bests Regulation of Property Agents Working Group Report

With Ben Reeve Lewis – the report is here.

Before I dig into this be aware of two things:

• I don’t have time to really absorb all of the report in detail before offering up my two pennerth, so it’s based largely on the key findings but with some more detailed reading here and there.
• What I am looking out for is specific to my job, namely, what proposals might seriously impact upon the criminals and ne’er do wells I deal with each day.

And I have to say, on that second front I’m cautiously impressed.

A new Regulator for the Property Industry

One of the biggies is the plan to create a single, over-arching lettings agency regulator, a kind of ‘Supreme being’ with control over the whole industry, sitting under the Secretary of State for Housing, Communities and Local Government.

With this notion of a regulator sitting on the throne, the report also recommends getting rid of the different property redress schemes, which will be interesting, just a few years after creating them.

Having said that, the report also states that the regulator will be able to devolve certain functions to other professional bodies who might be able to deliver. They hope that this may provide a portal for third parties to make complaints to, including whistleblowers in the industry.

I have to say, in my time I’ve never found any point in working with the voluntary accreditation bodies when assisting a tenant with complaints about their agent. I gave up on that years ago and I don’t see anything to get excited about when it comes to the various redress schemes.

No such bodies seem geared up for the types agents we deal with, which is a point I keep banging on about.

In a recent case, the Property Ombudsman awarded £112,000+ on penalties against 7 letting agents, and they also expelled from the scheme, only to have them close down their businesses to avoid sanctions.

Hopefully, a regulator will have sharper teeth and this might well come through another recommendation of the report that I think may well be the most damaging to dodgy and criminal letting agents.

Qualifications for Letting Agents

The proposal is to have every individual letting agent trained and qualified to an agreed Ofqual level 3 for agents (equivalent to an A level) and level 4 for directors (equivalent to a certificate of higher education)

That alone will knock out many of the knuckle-draggers at the bottom end.

There was a mooted point a while back about agencies having a single qualification as an employer but this now makes it very difficult for rogue agents to operate.
The report talks of qualifications being essential to be granted a licence to carry out reserved activities, which are given as:-

• Conducting viewings;
• Market appraisals;
• Negotiating with and on behalf of clients;
• Signing contracts;
• Providing direct advice to clients;
• Instructing contractors to undertake works;
• Collecting or handling client money; and
• Having responsibility for the health and safety compliance of a property.

The implication being, that if you breach the terms of your licence it gets taken away.

Although in a different section the report suggests a condition of a licence would be membership of a redress scheme, that they also recommend abolishing elsewhere.

Again the report states:-

“A lawyer who misappropriated client funds or mishandled confidential information would not be expected to transfer, consequence-free, to alternative employment, with their employer bearing all responsibility. A culture of individual responsibility may help promote ethical behaviour within an industry,”

Now that is certainly music to my ears. The potential of every individual letting agent having to hold a licence, which can be taken away is a very big stick indeed.

Of course, we can then expect a healthy growth in the industry of producing and selling fake licences but let’s hope government bears that in mind and creates a central online register, like Gas Safe, so you can check if someone is legit.

On the subject of Variations from warnings, penalties and revocation the report states:-

“We support the principle that the strongest proportionate deterrent should apply to those agents who fail to license so that unlicensed agents do not just accept their penalty as part of doing business”

Assurance and enforcement of breaches

This is the other thing that jumped out at me.

The recommendation that the regulator be responsible for issuing warnings, agreeing on remedial actions, revocation of licenses and prosecution for carrying out unlicensed activities.

That is very radical because for the first time, the job of policing conduct in the PRS isn’t down to the resource-strapped local authorities.

Despite significant sanctions already being in place for dodgy agents, they continue to proliferate, simply because there aren’t enough Trading Standards Officers and those that are in post have a wider job description than just dealing with letting agents. Included in their brief is counterfeit alcohol and tobacco, under-aged sales, doorstep crime, weights and measures etc.

So in a way, the report undermines itself on the matter of regulation when it states:-

“National Trading Standards Estate and Letting Agency Team working as the lead enforcement authority for estate and letting agents, have significant experience and knowledge of the property sector which leaves them well placed to continue undertaking enforcement activity. It would seem perverse not to take advantage of the resource and expertise already in place by transferring all enforcement powers to the new regulator. Indeed, there are a number of regulatory systems, which work via flexible cooperation between a central regulator and local trading standards teams”.

I would draw the reader to this passage:-

“It would seem perverse not to take advantage of the resource and expertise already in place”.

That’s the point, those resources aren’t in place but there you go.

There’s a lot to it and I only have around 1,000 words to talk about one angle of it and it is just a report at a time when only yesterday (as I write) Boris pulled off his own cabinet cull.

So nobody knows if the report will lay gathering dust on a civil servants desk while Boris spends the next few months lulling everyone into a false sense of optimism by recruiting an army of cops, announcing pay rises and tax breaks in advance of a general election to keep the Tories in power, after which he will have been dispatched back to the funny farm and celeb TV panel shows and we will all be back to the same depressing austerity and dull, grey suits in charge.

Keep an eye on this though. The press blurb talks about April 2020.