Lords side-steps amendment to extend estate agents rules to lettings and management agents
The Government has torpedoed attempts to extend the same rules governing estate agents to lettings and management agents.
An amendment to the Enterprise and Regulatory Reform Bill had been tabled by Baroness Gardner in the House of Lords and would have extended the definition of estate agency work, as defined in the Estate Agents Act 1979, to include lettings and management agents.
The amendment stated: “Those activities described in the amendment are: acting on clients’ instructions in relation to the letting of an interest in land, managing lettings and block management arrangements (such as in the residential leasehold sector) and any management activities undertaken by any person in the course of a business in connection with land or interests in land.”
Under the Estate Agents Act you cannot be an agent if you are undischarged bankrupt or the OFT has banned you, with warning and prohibition orders served. Instead the Department for Communities and Local Government wants all lettings agents to sign up to an approved redress scheme. This means unsolved grievances with agents can go to the Ombudsman.
Critics argue that mandatory ombudsman schemes are no substitute for a licensing system where repeat offenders risk having their licence to trade withdrawn.
The Royal Institution of Chartered Surveyors says that while the change to the law will give landlords and tenants much-needed access to recourse in the event of poor practice, it offers the consumer support only after the damage has been done.
RICS residential director Peter Bolton-King says: “RICS has long called for regulation of the lettings industry and this is a step towards ensuring tenants and landlords are comprehensively protected. We would now like to see lettings and managing agents required to sign up to a professional regulation scheme that would ensure a better standard of professionalism right across the sector. There is a strong business case for better targeted regulation and we are working with government to this effect.”
But the National Landlords Association’s head of policy Chris Norris says: “The Housing Minister’s announcement that the Enterprise and Regulatory Reform Bill will be used to provide a basis for future, specialised regulation of letting agency standards is very welcome as it will provide the best means to ensure that landlords and tenants who choose to use professional letting services receive adequate protection.”
Article courtesy of Mortgage Strategy