A couple of months ago I was minding my own business, getting on with getting on (as you do), when someone called Sean Hooker rang up and asked if I would join his ‘Property Redress Scheme’ Council.
I sort of knew Sean but not well, and it was a bit of a bolt from the blue.
To start with I was not keen. Would it take up a lot of time? Would it affect my independence in the industry? Would I get paid? I nearly said ‘no’.
My view has always been that letting agents should have ‘proper’ regulation. Like solicitors do. After all they too hold other people’s money. Lots of other people’s money.
But then (I thought) a compulsory Ombudsman service is the first step on the way to agent regulation. It’s a start.
I have written often on this blog about the shocking lack of letting agent regulation in this country – so if the opportunity comes along for me to help make it a reality, I shouldn’t turn it down.
So I said ‘yes’.
The first meeting
The first meeting (to ‘meet the team’) was on Monday, and took place at New Barnet where the PRS offices are. A four hour trek from Norwich (where I live) for me, but (I found out) conveniently close to the other Council members.
Indeed, Paul Shamplina told me that it had taken him just six minutes from his home. Thanks Paul.
But what is the Property Redress Scheme all about? And why is it necessary? After all we already have the Property Ombudsman (TPO). And the Ombudsman Service. Why another?
About property redress / Ombudsman services in general
A redress or Ombudsman scheme is an independent service, licensed by the Government, which provides somewhere that their members’ customers can complain to.
To get redress.
The Ombudsman / Head of Redress will provide a mediation service and where necessary make a decision – with the power to fine and order the member to apologise, make payments and do whatever is necessary to resolve the matter in accordance with the decision made.
The member will be the letting agent or property manager. The customers, who will now have somewhere independent to complain, will be their landlords or tenants.
The missing 40%
Although there are two existing property Ombudsman schemes (TPO being particularly well known and respected), about 40% of letting agents and property managers are signed up with neither.
However from about October of this year (or maybe April of next) you have GOT to sign up to a scheme – if you are an agent or property manager.
Under regulations about to become law, it will be mandatory and you will ultimately be vulnerable to being closed down if you don’t.
About The Property Redress Scheme
The Property Redress Scheme is a different type of service designed to appeal to people who don’t want to join TPO or the Ombudsman service.
These will probably be the smaller independent firms who have shied away from the hassle and admin. Or who don’t see the need.
So the Property Redress Scheme is a very basic service which will allow you to comply with the law without a lot of hassle. All you need to do to join is complete a fairly straightforward form, pay the fee (£95) and thats it.
You are compliant.
You will have a sticker for your window, a logo for your website and Bob’s your Uncle.
Shiny and new
There are all sorts of plans. Help and guidance for letting agents. Different levels of membership. Member services. But thats all in the future.
What there is now, is your basic scheme which will allow letting agents and property managers to become legal without a lot of messing around and red tape.
My role on the Council will be (along with my co Council members) to advise the ‘Head of Redress’ (Sean) and make decisions (e.g. regarding expulsion) if a member breaches the terms of the scheme.
Sean described it as being the ‘conscience’ of the scheme.
Its all very exciting. A brand new scheme, all shiny and new. Just for you.
I’ll let you know how I get on.
I’m afraid I have to ask these question with my enforcement officer’s head on Tessa, not as a friend of yours.
What will happen to agents who dont join?
What will happen if the scheme gets repeated complaints about the same agent?
What will happen if the agent ignores the sanctions imposed on them by the scheme?
I have had precious little support in helping clients complain about their agents in the past and I am skeptical.
Well the redress schemes themselves can only expel members as an ultimate rememdy. For example if they refuse to abide by the Ombudsmans decision.
The letting agent or property manager then be in breach of the law and acting illegally in continuing to trade while not being a member of an authorised redress scheme.
The draft regulations refer to a monetary penalty not exceeding £5,000. I would hope also that Trading Standards / the Local Authorities will take steps to close down persistently offending organisations. I believe they have the power to do this under the Enterprise Act.
However most people are law abiding and if something is a legal requirement they will comply (although it may take a while – as is the case with tenancy deposits).
We will also be able to ‘name and shame’ which is not something any self respecting business will want.
After all agents and property managers are in a position of trust, so if they prove untrustworty this will impact on their business.
It will be up to people like thee and me to get the word out – landlords and tenants will be able to check online to make sure that their agents are registered in the same way that you can for tenancy deposit protection.
As I said in the post – it is a start. And its better than nothing. At least unhappy landlords and tenants will have somewhere to complain now – or their agent will be acting against the law (which is not the case now).
An interesting point Tessa,
One I just put to one of our Trading Standards bods.
He said the Enterprise Act would not allow the council to shut down a business but they could obtain a court order enforcing compliance with the breach, in this case expulsion from a redress scheme.
Such notices work like injunctions and have penal notices on them so a named individual could theoretically be imprisoned for failing to comply.
I say theoretical because even when I get numerous injunctions for harassment and illegal eviction the landlords often ignore them but the judges still wont commit to prison for breaches the penal notice.
One judge in a case I dealt with where a landlord had chucked out a woman and two kids and refused to let them back in said “We dont want to take people’s liberty away lightly”. To which the sane response would have been “OK But you allow the landlord to take their home away lightly”
The scheme will be for those “who don’t see the need.”
Hmmmm.
This just seems like a way for firms to become compliant without really making any effort to improve their service.
I thought we wanted to raise standards as well as provide redress? How can this scheme do that without even a code of practice?
The important thing initially is just to get firms signed up so (1) we know who they are and (2) their customers have somewhere to complain to.
At present all the customers of the 40% or so of firms who are not signed up to a redress scheme have nowhere to complain to.
I understand that the government are going to publish a code of conduct in due course, hopefully before the scheme becomes mandatory (I have not seen it yet). So the PRS members will be judged according either to that (fairly basic) standard or, if they have signed up to another code voluntarily, that code.
Once members are signed up then they can be offered training and guidance and standards can gradually be improved in that way.
As I said, its not perfect but its better than nothing.