Obligatory redress schemes for lettings agents and property managers

On 1 October 2014, it became compulsory for all lettings agents and property managers to sign up to one of three government-approved redress schemes. The London Evening Standard reported last week that numerous London agents had failed to register by the deadline. Their article can be viewed here. The obligation was created to give tenants and landlords in the private rented sector the ability to complain about residential agents and managers to an independent body.

“Lettings agents” mean agents who in the course of business are instructed by a private rented sector landlord to find a tenant or by a tenant who wants to find a property in that sector. They are covered where the tenancy is an assured tenancy under the Housing Act 1988 (which it usually is) except where the tenancy is a long lease or the landlord is a private registered social housing provider. They are not covered if they only publish adverts or provide information, or provide a way for landlords and tenants to contact, or communicate with, each other directly. There are other exclusions.

“Property managers” mean managers who in the course of business are instructed by another person to arrange services, repairs, maintenance, improvement, or insurance or to deal with any other aspect of the management of residential premises. Again, private registered social housing providers are excluded. The work must relate to premises consisting of a house let under a long lease, an assured tenancy, or a Rent Act 1977 tenancy. There are other exclusions.

The three schemes that may be joined are: Ombudsman Services Property; Property Redress Scheme; The Property Ombudsman. Each will publish a list of members on their respective websites so any prospective tenant or landlord can check whether a lettings agent or property manager has joined.

If an agent or manager has not joined when they should have, the local authority may impose a fine of up to £5,000. The authority must first give notice of intention to impose a fine and the agent or manager has time to respond, after which the decision whether to fine will be made. There is a right of appeal. Further fines can be imposed if the agent or manager still does not join.

Charles Hylton-Potts