The membership bodies and their Client Money Protection insurers have been told that they must come clean about their policies and what they cover.
Nicholas Cooper, managing director of Northwood and chair of the SAFEagent scheme, delivered the call in a hard-hitting speech at the NALS conference in which he also revealed the scheme’s immediate objectives.
One is to ‘do more to tighten the noose around rogue operators’. An information network is to be established with the aim of cascading information about rogue agents between industry organisations, with a hotline to Trading Standards being simultaneously set up.
A second objective is to build SAFEagent’s membership from 2,000 to 5,000 by the end of next year.
Currently, Cooper said, the whole issue of CMP was shrouded in secrecy.
He said that there were only two insurers in the CMP insurance market, both offering similar policies, but both were reluctant to publish any data as to the level of payouts.
And he criticised them for failing to provide any coverage at the exact point it was needed, once an agent stopped belonging to any of the organisations – citing both ARLA and NALS.
He also criticised the membership organisations – ARLA, NALS, RICS and the Law Society – for hiding away CMP on their websites, and for failing to spell out what the policies covered and how they worked.
He said that visitors to the ARLA website had to scroll some way down before finding anything about CMP, and that it was nowhere to be found on the RICS website.
“If we struggle to find it, then what hope does a landlord or tenant have?” he said. “Lack of consumer awareness is the real problem.”
He said that SAFEagent was born out of agents’ frustration that CMP was not being properly promoted by any of the bodies, even though it was meant to be a membership benefit.
Cooper said: “Meanwhile, firms continue to go bust – and that is bad news for the whole industry.”
He also said that membership of an organisation did not deter agents from unethical practice.
Cooper said: “We have all been offered for sale firms with holes in their accounts, and irregularities over client money, even though they are members of an approved scheme.”
He said that there were some sales to other companies which ‘smell’. He said that in some cases, the buyer acted like some kind of white knight, helping customers of the previous agent claim against a tenancy deposit scheme. In fact, he said, this was no more than an ‘insurance scam’.
“Then there are liquidations, whereby agents place adverts in the London Gazette, supposedly to inform their creditors. But who has the time and inclination to trawl through the London Gazette?”
Cooper said the agent then winds up and sheds all their debts, before getting back into business with an almost identical name.
He said he had known firms do this more than once.
In other parts of his speech, Cooper said that SAFEagent was not a trade body and did not compete with them. He did, however, call on them to give ‘more support than they already do’.
He also said that he did not believe licensing was the answer: “What we need is proper enforcement of existing law and more prosecutions, not more red tape.
“I believe CMP should be compulsory for all agents, as should membership of an ombudsman scheme.”
At the SAFEagent forum next month, all the membership bodies, tenancy deposit schemes and insurers will be invited to spell out their policies as well as share other information.
Comments
Anyone know where EW is? His wisdom and wit it missed.
I agree - the food was much much better than expected.
I wouldn't have done EW's role in introducing someone like John Humphrys for all the tea in China - but he did it bloody well.
A really great night with an extremely warm atmosphere. No self serving speeches or self promotion. Well done NALS and thanks for the invitation.
too much mystery and too many secrets!! ROFLAO
I can just see LAT next week:
Shock, horror - Lettings agents are all revealed as Freemasons!!
I was at the dinner, and it was a great evening. I agree with the comments about the speakers. Very nice atmosphere and food, we all remarked on it. A really special evening. A shame more didn't go, but I believe this was NALS first pre-conference dinner, so word will get out. MUCH better than most such events
Did anyone go to the Pre Conference dinner?
It was very good. EW & John Humphrys seemed to get on well and EW's introduction was superb - the Q&A was fantastic. Well done NALS - great value.
Well done to Nick.
There is too much mystery and too many secrets. Like the TDS protection doesn't protect a Landlord owed money from a deposit. Its time to put away squabbles and send out a joint message - at the same time.
Every message to date is diluted by "They are just promoting themselves etc"
As for RICS - find me one Landlord or tenant who would ever discover a mention of renting on their website. They would look at one, maybe 2 pages and think "Oh - they dont do lettings"
SAFE is a least getting headlines and spreading a message. They have the balls to stand up and say what we all think.
Whats in it for the steering group? Nothing. Controlled by NALS? I think this proves otherwise.
So far ARLA and UKALA announce they will join the joint CMP forum - who would have thought that 2 years ago??
Great effort SAFE
Does no-one ever read the headline story first before pecking away at the keyboard? The story was concerned specifically with CMP, not lettings, not deposits but CMP. Mr Cooper claimed there was no information at all on the RICS website about their CMP and that ARLA's was hard to find
@ Dave Evans - I never suggested it was, what i pointed out was that there is information about the RICS CMP, and ARLA's (although their's is a bit scant), readily available to those who look for it.
@ Doh - Doh indeed; it wasn't a hyperlink, it was a manual link - try cut and paste
@ ARLA agent - what do you think you should search for if you were looking for information about that companies CMP? cheese sandwiches perhaps? holidays in Tenerife? Try searching 'Client Money protection'
@ Hellie - what do you want? a single webpage containing every bit of information relating to that company? it IS readily available if you use the sites search facilities.
UKALA is very much in favour of working with other industry bodies and pleased to also be attending the CMP forum next month.
For clarity, CMP Insurance is now also an integral part of the UKALA membership offering, as detailed on front page of our website: www.ukala.org.uk
The Knight Frank - semantics possibly but I am afraid I am of an age where the term regulator is used to cover an industry or profession, not a relatively small proportion subscribed to by firms or individuals voluntarily.
You can't practice as a solicitor or a chartered surveyor in this country without being a member of The Law Society or RICS. The problem is you can operate as a letting agent in this country by simply having the capacity to breathe.
London Agent - apologies I didn't address the 5th & 6th. providers. Sorry, I can't comment but there are.
Smart Agent - you say "3) Since you cannot effect an insurance policy to cover actions over which you have complete control, comments implying that all letting agents should 'take out' CMP are totally misleading"
Nick didn't suggest otherwise. I was at the conference and was impressed at the candid way in which he challenged this issue.
For heavens sake.
SAFE is just trying to do something sensible. It isn'y competing nor does it have aspirations to be a regulator. It is simply trying to promote professional membership and point consumers in the right direction.
All this arguing between NFoPP, NALS, RICS etc is counter productive.
Why on earth can't everyone see that it's th customers interests we all claim to hold dear and combine to provide a united message and leave 'membership market share' for agents to decide.
It really is so petty
Smart Agent - ARLA's website states:
The Association of Residential Lettings Agents (ARLA) is a professional membership and regulatory body for letting agents and letting agencies in the UK. ARLA recognised the requirements of the residential lettings market were so detailed and specific that a separate organisation was required to promote standards in this important sector of the property industry.
The fact is that any body who requires it's members to follow a code of practice and a comprehensive set of rules (which a very similar to thoose of RICS and Law Society) is a regulator. To argue otherwise is really little more than semantics.
NALS was set up as a licensing umbrella by the ODPM and ARLA were part of it's inception.
Isn't it easy to sound authoritative when writing confidently.
Just for the record, my understanding is as follows:-
1) "RICS and Law Society do not have insurance - they have a fund in to which members pay."
The 'funds' you refer to are, I believe, designated as Captive Insurance Companies and would have their own reinsurance programmes in case of catastrophe. In the case of RICS they would have to be if they have been accepted by DCLG as qualifying under the TDP tendering arrangements. They are by definition insured. Admittedly not available to anyone other than a fully qualified Solicitor or a Chartered Surveyor.
2) Your use of the word 'regulators' is, I submit, misplaced. RICS & The Law Society are professional bodies and thus regulators by any definition. However, ARLA, NAEA are trade associations to which one belongs out of choice, normally for collective financial benefit, NALS is / was an accreditation body but now styles itself as a licensing organisation, though I am not sure with what authority it licenses.
3) FREE - simply because it costs DCLG nothing to be seen to be giving support to an initiative which appears regulatory, but is in fact, marketing driven.
Well done SAFE for challenging the establishment and asking this important question.
RICS have NO INFO readily available on their site - to claim otherwise is deluded
ARLA hardly make it a headline - at least SAFE focuses on CMP
Its time people joined together in a common cause.
Ray - A simple search for what??
Once discovered - I read it and you know what??
No mention of Landlord, Tenant, Rent or Deposit.
How is the average person meant to get any confidence from this on a website which makes no reference to lettings.
At least ARLA is clear on this
Ray - that link doesnt work.
Ray Comer - respectfully - the RICS homepage is devoid of any reference to lettings - the best is residential property which yields nothing.
Click on 'what we do' and again - nothing. 99.9% of people would assume you have no involvement in lettings and would not bother trying to prove otherwise.
On this basis, Nick is absolutely correct.
Smart Agent - its a fact - there are only 2 firms who provide cover for CMP to ARLA, NAEA and NALS.
SMART AGENT - please read properly.
The are currently 5 CMP providers - but only two insurance firms who offer cover. Regardless of who offers CMP - the insurance companies who provide cover just 2.
RICS and Law Society do not have insurance - they have a fund in to which members pay.
How can safe be a cheap alternative to regulation? You HAVE to be a member of one of the 5 regulators to qualify. As regards a Government pet - why is it so many consumer organisations, TPOS, TSI, OFT, DCLG and many others support it?
More sour grapes
Worrying that the Chairman of, what is rapidly becoming, a Government promoted pet, not to mention cheap, alternative to 'regulation', should make so many misstatements of fact and demonstrably have so little understanding of the legal issues involving CMP.
1) There are at least 5 CMP insurers operating in the market currently, With a sixth seemingly on its way.
2) The trade bodies themselves 'insure' their undertakings / promises that they make to the public regarding the financial probity of its members. The insurers rely on the quality of the 'due diligence' performed by the trade body to enable them to offer cover. There is no contractual relationship between the insurer and the beneficiary (public).
3) Since you cannot effect an insurance policy to cover actions over which you have complete control, comments implying that all letting agents should 'take out' CMP are totally misleading. They qualify for the right to participate by agreeing to adhere to the organisations rules.
The original concept of NALS, sponsored as it was by HMG, was intended to provide the minimum entry portal into the lettings industry - thus all agents operating in the sector would be compelled to sign up to a minimum industry standard. Indeed it would have done so if the then directors, ARLA, RICS & NAEA hadn't prevented it from fulfilling its destiny. Ironic then that NALS is undertaking the administration?
Why do these people always try to dirty their own industry?
Nicholas Cooper said "that visitors to the ARLA website had to scroll some way down before finding anything about CMP, and that it was nowhere to be found on the RICS website"
.How about this Nicholas http://www.rics.org/Global/Downloads/rics_cmps_firms_guide.pdf
or this http://www.rics.org/Global/Downloads/rics_cmps_clients_guide.pdf
A simple use of the search facility on each website provides the information in seconds.
Nicholas said “If we struggle to find it, then what hope does a landlord or tenant have?” Hopefully they are a little more computer literate than perhaps you are! Your own companies website isn't exactly brimming over with CMP information is it?
If you are going to sit in the big chair at least have the decency to stop sniping at the other bodies without getting your facts correct first.
ARLA does pay out if the misappropriation took place during a period of membership and has recently just dealt with a 2010 claim on that basis. There are more than 2 insurers as far as I understand.
I do support the concept of the meeting next month and would publicly confirm again that ARLA will be attending. We have never hidden when we will pay out.