ARLA angry over RICS claim about auditing

ARLA has acted angrily to a RICS statement that only RICS letting agents are subject to external audits.

A press release for the Scottish market was issued on Monday night as part of RICS’ campaign for further regulation of the lettings market.

It said: “It is currently possible for anyone to set up a lettings agency, without appropriate qualifications, knowledge or understanding of housing law or rental processes. There are well over 500 letting agents throughout Scotland, many of which are unregulated.

“Estate agents are regulated by the Law Society of Scotland and some letting agents are members of RICS or accreditation agencies like Landlord Accreditation Scotland (LAS) or the English based Association of Residential Letting Agents (ARLA), which has a code of conduct for members. However, only RICS has mandatory external auditing to ensure that member letting agents are following the code of conduct.”

It went on: “At present lettings agents are not required to abide by a government, ombudsman or regulatory body code of practice – demonstrating a lack of legal responsibility. Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation, such as RICS.”

Sarah Speirs, director RICS Scotland, also claimed in the statement that many tenants are still being charged unlawfully.

She said: “Tenants looking to rent a property can only be charged for rent and a deposit, legislation which was clarified by the Scottish Government earlier this year. However, many potential tenants are still charged additional costs, including administration fees, inventory fees and credit checks.”

Responding to the statement, ARLA managing director Ian Potter said: “RICS have clearly made a mistake in their statement. They claimed that ARLA agents do not have to pass an external audit: this is incorrect.
 
“All ARLA letting agents are externally audited and must meet the standards set out in ARLA’s code of conduct. RICS are wrong to state that ARLA agents are not externally audited, and we would be grateful if they would correct their statement.”

Peter Bolton King said yesterday: “Our Scottish press release was referring to more than just the checking of clients’ accounts.

“RICS Regulation monitors, inspects and advises RICS members and Regulated firms to uphold professional, ethical and business standards.

“Simple, targeted regulation is desperately needed to offer greater reassurance for landlords and tenants who use letting agents. RICS’ arm’s-length regulation ensures independent monitoring of rules, and targets areas of highest risk.

“Firms that are ‘Regulated by RICS’ must have processes in place to manage risk and handle complaints in a professional manner, hold adequate and appropriate levels of professional indemnity insurance to safeguard both their firm and clients, and ensure that their staff are adequately trained and competent.
 
“At present, lettings agents are not required to abide by a government, ombudsman or regulatory body code of practice – demonstrating a lack of legal responsibility.

“Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation, such as RICS or ARLA.”

The RICS statement is here:

http://tinyurl.com/c7hufok