A complete lack of effective regulation has allowed the lettings sector to become the property industry’s Wild West, putting consumers at risk.
The accusation comes from the RICS, which is stepping up its campaign for the statutory regulation of agents.
In an unusually strong statement, the RICS said too many letting agents are corrupt.
The RICS lettings survey, published today, highlights the potential for rogue lettings agents to cash in on the current rental boom, taking advantage of consumers’ ignorance.
Although 92% of tenants said they were satisfied with their lettings agent, two-thirds said they did not receive an inventory when moving in to a property.
The RICS said this clear lack of awareness – or apathy – from tenants as to what they should expect from their agent is compounded by a lack of effective regulation which can lead to potential consumer detriment, with renters sometimes being charged extortionate fees or given unfair terms.
The results of the survey suggest renters have come to expect this level of service.
The RICS noted that it is currently possible for anyone to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process. Nor is it compulsory for agents to conform to any code of conduct, provide safeguards or register with a government-approved redress system.
Despite this, four out of five tenants believe lettings agents are required to abide by a government, ombudsman or regulatory body code of practice.
Yet there is a clear demand for regulation amongst consumers. The RICS survey shows that 93% of tenants believe letting agents should have to meet an industry code of practice, with 89% believing it should be compulsory for agents to belong to a regulatory body. In total, 87% of tenants supporting a single compulsory regulation scheme for all letting agents.
Peter Bolton King, RICS global residential director, said: “A good lettings agent can be worth their weight in gold for both landlord and tenant.
“However, there are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk.
“Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges.
“What we would like to see is the Government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable.
“Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation such as RICS.”
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Comments
@ Frank
"What has the Institute of Chartered Surveyors got to do with Lettings? "
Uhh, how about lots of their members have letting departments? its not just commercial property.
My question is...
What has the Institute of Chartered Surveyors got to do with Lettings?
Start a RELEVANT campaign PBK...
PBK, you really need to engage your brain a little more often before speaking. And when it's a subject you know nothing about, it's better not to speak at all.
Someone once said "it's better to keep your mouth closed and be considered a fool, than to open it and remove all doubt".
You need to understand that when tenants do "not receive an inventory when moving in to a property" they are being given an massive advantage, whereas the agent/landlord is giving themselves a massive problem. Simply, without a signed, detailed inventory the landlord/agent cannot withhold any monies from the bond for dilapidations. TDS and DPS have already made this clear.
I appreciate that this requires the bond to have been protected - and this is often not done - but there is already enough legislation and regulation in place to make this compulsory. Another layer of licensing or regulation or membership, with all the associated cost (I mean RICS membership fees), will not improve this compliance.
When I see a RICS surveyor going out to one of my properties and actually valuing it for him/her self, without insisting on knowing what I marketed it for and what price I achieved, then I'll take you seriously.
Get your own house in order first before you start your next power-crazed mission.
Although 92% of tenants said they were satisfied with their lettings agent, - (lets ignore this bit)
two-thirds said they did not receive an inventory when moving in to a property. - (quick diall 999!)
Peter Bolton King, RICS - 'global' - residential director - (getting my business cards changed because I want this title too)
PBK - However, there are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk. - (Shhh don't mention the ones that do belong...)
Enough has been said already about RICS 'professional organisation' claim.
Maybe someone who does not directly benefit financially from letting agent regulation should make comment.
Not all press releases should be published without input from an independent journalist.
Here they go again - the RICS!
I have now just retired but 40 years ago generally the RICS were not doing a proper job in the then expanding consumer led residential market. After gaining some experience in a major agency and having a Marketing and a Management qualification at the time, I opened my first office - as did many other entrepreneurs.
The RICS are a good organization that seems to have the 'ear' of the government and for 40-50 years they have been angling for control the whole industry, sales and lettings. This I believe was the basic reason for the formation of the NAEA.. Quite rightly, membership of a professional body with minimum standards and qualifications should be a requirement but, in my opinion, not solely controlled by the RICS.
NFoPP - your views please.
Maybe if RICS was relevant in the lettings world this article would be useful?
I have the option of doing my APC to become chartered but the ridiculous costs of RICS membership really doesn't make it worthwhile, maybe they'll realise we're not all rich ex public school boys one day.
The common view of Estate Agents is that they do not do much for their money, not that they are necessarily corrupt. Fees in estate agency is another matter to the proper regulation of the lettings sector. If you are taking control of people's property and tenant's money, why should you not have to pass an examine or at least be governed by certain basic standards. It is only those that do not that would have anything to fear from regulation.
Given the number of corrupt surveyors involved in property scamms,and the opinion most people have of estate agents, I'd suggest RICS may be better employed adjusting their aim to different targets?