Big rise in complaints to ombudsman about letting agents

There was a 23% rise in complaints to the Property Ombudsman last year, according to its annual report, published this morning.

While most of the 16,378 inquiries did not proceed beyond the initial complaint stage, 2,187 cases did.

Noticeably, most of the initial complaints – 10,179 – were lettings related. By comparison, 5,319 of the initial complaints were against sales agents.

Ombudsman Christopher Hamer repeated his call for regulation of the lettings sector, saying it should become a priority after the General Election.

He said: “Regulation of the letting agency sector in a consistent and robust fashion can only be achieved through legislation. Voluntary initiatives to introduce controls are positive and mark out the agent willing to confirm, but those agents willing to do so are not the ones who expose the consumer to risk.

“Despite many industry stakeholders being committed to this same message, we all have to accept that formal regulation of the private rented sector is off the agenda, certainly in this parliament.

“I suggest it should become a priority for the government after 2015.”

Elsewhere in his report, Hamer says that some agents are still not up to speed with the Consumer Protection from Unfair Regulations (CPRs).

“I still see agents referring to the Property Misdescriptions Act and claiming that they did not need to disclose or would not have disclosed certain information about the property,” Hamer writes.

“Agents need to accept that the PMA was repealed in October 2013 and it no longer plays any part in the consideration of property agents.”

In lettings, 358 complaints went on to be resolved by mediation and 915 were the subject of formal reviews, meaning that 1,273 proceeded beyond the initial complaints stage.

One noticeable trend was that while complaints relating to TPO lettings agents rose by 21% last year, inquiries about non-TPO letting agents rose by 34.2%.

This, says the report, underlines the importance of forthcoming mandatory redress requirements for the lettings industry.

Of the lettings cases that proceeded to formal review stage, most (79%) were supported.

In sales, 236 complaints were mediated and 601 went to formal review, making a total of 837.

At formal review stage, 70% of the complaints were supported – up from 61% in 2012.

Other complaints were made on international sales, auctions, leaseholds and commercial agency, but the numbers were much smaller.

Membership of TPO also rose markedly last year, by 13% on 2012, with 1,155 new letting agent offices and 529 new sales offices.

In total, at December 31, there were 25,988 member offices, including 12,462 sales offices and 10,903 lettings branches.

As always in the report, the most interesting sections are the case studies.

In sales, one agent made it a condition that the purchaser used their conveyancing service. This was against the TPO code of practice and the buyer’s complaint was upheld.

In another case, the buyer withdrew because the basement, described in the particulars as being a room, did not have the required permission. The ombudsman ruled that under CPR, the onus was on the agent to have ascertained the situation.

In the lettings case study section, a tenant who said that she would never had moved into a property if she had known that the countryside view was about to be replaced with a building site, had her complaint upheld.

The ombudsman ruled that under CPRs, this was a misleading omission.

Article courtesy of Property Industry Eye

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