Agents Regulation chief says complaints about rental sector are common

The architect of the Regulation of Property Agents working group - which has called for agents to be trained and licensed - says he still routinely receives complaints about the lettings sector, even 18 months after his work has been completed.

Lord Richard Best, a cross-bencher in the House of Lords with decades of experience working in the housing industry, makes his comment in an interview with Angels Media chief executive Nat Daniels.

Daniels asks Lord Best whether enough is done to regulate the lettings sector, which is now becoming much larger and better recognised. 

Lord Best replies: “The problems of bad behaviour by some property agents have not gone away. I still receive serious complaints of very poor practice, coming from both consumers - landlords as well as tenants - and other agents who are rightly aggrieved by unfair competition from the rogues.”

In the question-and-answer session, now available on Estate Agent Today, Lord Best candidly admits his disappointment that the provisions of his RoPA working party have made only minimal impact so far, as the government has prioritised Coronavirus and Brexit.

He is also disappointed that his recommendations - which apply to sales and lettings agents, property managers and buying agents - does not extend to the short lets arena and the likes of Airbnb hosts.

Lord Best says: “It seems entirely logical that internet-based operators acting in an agency capacity should be covered by a new Regulator. But our Minister decided that we had enough on our plate without adding Airbnb and its rivals, so this is something for later.”

In the interview - which you can see here - the estimate given before legislation is enacted to put the RoPA recommendations into action is about two years.

Here is a summary of the 2019 RoPA recommendations:

Scope of new regulation: “We recommend that all those carrying out property agency work be regulated (including auctioneers, rent-to-rent firms, property guardian providers, international property agents, and online agents)” but this regulation will not extend to property portals like Rightmove and Zoopla nor to the Airbnb-style short-let sector.

“However, we recommend that the legislation required to regulate property agents should allow for future extension to the scope of regulation (e.g. to include at a future point regulation of landlords, freeholders and developers – as well as retirement housing managers and Right to Manage companies).”

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The new regulator: “We do not consider that an existing body could take on the role of the new regulator. Therefore, Government should establish a new public body to undertake this role. The new regulator should be established and run with regard to general principles of good governance, including: independence, openness and transparency, accountability, integrity, clarity of purpose and effectiveness. The new regulator, through its board, should be accountable to the Secretary of State for Housing, Communities and Local Government. It should publish an annual report on its progress in raising standards of property agents, using agreed key performance indicators – including customer satisfaction …

“We recommend that the new regulator take over responsibility for the approval of property agent redress and client money protection schemes. The new regulator should have the power to appoint a single ombudsman for property agents, rather than competing redress schemes, if they believe this to be the best way of improving standards.”

“The new regulator should be able to consider complaints from all sources. Where solicitors, lawyers or other professionals have evidence of possible illegal agent behaviour, they should be obliged to present it to the new regulator.”

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Licensing: “To confirm appropriate qualifications and credentials, property agencies and qualifying agents should be required to hold and display a licence to practise from the new regulator. Before granting a licence, the new regulator should check that an agent has fulfilled its legal obligations (such as belonging to a redress scheme and submitting a copy of their annual audited accounts to the new regulator) – and that they have passed a fit-and-proper person test. We recommend that the new regulator should be able to vary licensing conditions as it sees fit and that it maintains accessible records of licensed property agents.”

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Codes of Practice: “Codes of practice set out clear standards of behaviour. The Government has already committed to requiring that letting agents adhere to a code of practice, and we recommend that all property agents be required to do so. There should be a single, high- level set of principles applicable to all property agents which is set in statute: the ‘overarching’ code. Then, underneath, ‘regulatory’ codes specific to various aspects of property agent practice, binding only on those providing these types of services.

“Key principles for the ‘overarching’ code should include that agents must act with honesty and integrity; ensure all staff are appropriately qualified; declare conflicts of interest; and have an effective complaints procedure in place. To develop and maintain the ‘regulatory’ codes, the new regulator should establish a working group for each sector of property agency to work up sector-specific detail.”

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Qualifications: “In the new regime, every property agency should be responsible for ensuring their staff are trained to the appropriate level and clear oversight arrangements are in place for junior staff. To ensure levels of qualification are appropriate yet proportionate, the working group recommend that licensed agents should be qualified to a minimum of level 3 of Ofqual’s Regulated Qualification Framework; company directors and managing agents should be qualified to a minimum of level 4 in most cases.”

The new regulator will be expected to develop a system of qualification quality control.

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Leasehold and freehold charges: “The new regulator should be given a statutory duty to ensure transparency of leaseholder and freeholder charges, and should work with the sector (property agents, developers and consumers) to draw up the detail of the regulatory codes to underpin this aim as it applies to property agents … We recommend that the new regulator takes over from the First-tier Tribunal the power to block a landlord’s chosen managing agent where the leaseholders have reasonably exercised a veto. We also recommend that the new regulator provides information on managing agent performance to allow landlord freeholders - and where relevant, leaseholders - to make an informed choice of managing agent.”

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Assurance and enforcement: “We recommend that the new regulator should have a range of options for enforcement action according to the seriousness of the infringement and how regularly it has occurred. These options should range from agreeing remedial actions and issuing warnings up to the revocation of licences and prosecutions for unlicensed practice.”

“The new regulator and other bodies (such as Trading Standards and redress schemes) will need to share information and work together effectively. There should be a system of flexible working between the new regulator and Trading Standards teams, and the new regulator should set out guidance clarifying their own and Trading Standards’ roles with regards to enforcement action to avoid duplication.”

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You can read the full RoPA report here.