New regulation format essential for lettings industry says Rushbrook & Rathbone
Recent research on various schemes available in the private rented sector has raised debates within the industry as experts question whether they have helped to raise standards or not
Sarah Rushbrook, Founding Director of property management company Rushbrook & Rathbone, believes that there is currently still very little value placed on the work of letting agents and that more needs to be done to play a role in changing the standards in the industry.
“Government-backed schemes have been introduced to help safeguard tenants and landlords, and to also improve standards in the private rented sector. In 2007 the Tenancy Deposit Protection scheme was introduced and I have read research recently stating that tenants are now more aware of what is available to them. This in itself is good news as tenants should absolutely have all knowledge about requirements now in place, but I don’t think that this scheme has had any real impact on the market and the fact of the matter remains that something else needs to be done urgently to raise the value of the service as it is imperative if the industry is to prosper.”
With already so much legislation covering the private residential letting sector, some of which hasn’t had the desired effect, Sarah wonders if there could be a simpler way forward
“I want to make an issue of the fact that there are two distinct roles performed by letting agents, the first being the sales role of marketing the property and securing the tenant, similar to the role of the estate agent and the second being that of a legal advisor and financial controller. If you compare the process to that of selling a property where the legal and financial aspects of the sale are handled by solicitors surely there is a case for making letting agents or managing agents who deal with legal documents and handle client’s funds answerable in the same way.”
“Solicitors are heavily regulated, and any solicitor found to have mishandled client funds can be struck off and no longer practice. Rental income should have the same value as monies that pass through the hands of a solicitor as surely all clients’ monies should be protected in the same manner. People sell their homes with absolute confidence that the financial aspects will be dealt with properly by their solicitor, and if not they have a very clear route for redress and I believe that it should be the same in lettings.”
Sarah urges the Government to look at how the industry as a whole is regulated, including private landlords as they are also handling other people’s money.
“The timing is perfect for a reform. Although the industry is thriving as people struggle to finance the purchase of a new home, it is widely known that inexperienced agents have opened their doors to the lettings arena causing all sorts of problems to the reputation of agency practice. Legislation so far hasn’t rectified this and opting for certain letting agent practices to be regulated in a similar manner to a solicitor would be a simple alternative to self regulation with all the different bodies with different levels of entry requirement. Going forward in this manner could make it a standard and common obligation for all letting agents who provide the supporting legal and financial assistance.”
Article courtesy of Property Reporter
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