The Ministry of Housing, Communities and Local Government (DHCLG) has announced new measures for the lettings and property management sectors.
Caxtons Chartered Surveyors is a full service property company based in Kent providing property expertise across the South East - including residential lettings and management.
Alan Stewart, director and a Fellow of the Association of Residential Lettings Agents has heard it all before.
"Banning orders against rogue landlords and letting agents who commit offences came in to force as part of the 'Housing and Planning Act 2016' and local authorities will be able to share that information. However, there are so many rules and regulations designed to catch these offenders that just aren't being enforced.
"At Caxtons we hope that if and when the latest proposals become law they are rigorously policed and applied. As an accredited letting and managing agent we already have codes, laws and regulations that are being flouted by some 'fly-by-night' agents who set up with no qualifications or knowledge of the sector. We know that letting agents are already in breach of the existing code that requires us to display charges prominently in offices and online. But nothing is being done to challenge them or let potential tenants and landlords know."
The new proposals are, in general, welcomed by the sector and comprise a compulsory Code of Practice covering all letting and managing agents to ensure that:
- All letting agents have professional training with at least one member of staff holding professional qualifications
- All abide by industry standards
- That blatant breaches of the new Code will be a criminal offence
- Fines for rogue landlords should be appreciably larger and in the worst cases, properties should be confiscated
- A new Regulator will be appointed to enforce the new Code
- The new Regulator will tackle unfair letting fees
Sadly, bringing the proposals on to the statute book will require Parliamentary time, which is in short supply particularly with Brexit looming. And the finer detail of the Code is yet to be finessed by working parties made up of user and regulatory groups.
Housing Minister Heather Wheeler said "Most property agents take a thorough and professional approach when carrying out their business, but sadly some do not.
"By introducing new standards for the sector, we will clamp down on the small minority of agents who abuse the system so we can better protect tenants and leaseholders who find themselves at the end of a raw deal."
It is hoped that the proposals, and the promise that penalties in the form of criminal charges, will be enforced where mal-practice is uncovered.
"This move will reinforce our message about using reputable agents and I believe the non-compliance figure for displaying fees was over 90% with little or no repercussions. The provisions are already contained in the Consumer Rights Act 2015 and it appears that these will be amended and strengthened in the Draft Tenant Fees Bill, which is now working its way through the Parliamentary process." says Alan.
Having completed their examination of the draft Tenant Fees Bill, members of the DHCLG Committee are supporting change to apply stricter regulation to tenancy deposits including smaller deposits, what fees will be permissible, and diligent enforcement of the regulations.
Recommendations include capping tenancy deposits at five weeks' rent, rather than six and returning holding deposits if tenant referencing fails the required criteria.
Industry experts are concerned that the latter will lead to additional problems for tenants and agents. If agents are unable to retain holding deposits and the potential tenant fails referencing checks it may lead to agent bias in selecting only the best tenants to avoid expense associated with failed referencing.
The HCLG Committee Report says the Bill will
...increase letting agents' incentives to compete for landlords' business resulting in a more transparent market with lower overall fee levels and a higher quality of service
and that a fee ban will
....reduce the risk of unfair practices in the form of double charging ... thus making the sector more competitive, more affordable and of a higher standard.
Where leaseholders are concerned, they will be able to challenge unfair fees and service charges and there will be support for leaseholders who want to sack management companies who charge a lot for doing very little.
When interviewed, Sebastian O'Kelly, a prominent campaigner for a fairer deal for leaseholders, recently said he would hope the new regulator is "Somebody who is completely outside the leasehold system, so none of that terracotta army of lawyers and surveyors who depend on the leasehold system and its inefficiencies for their livelihood. It needs a very robust independent regulator who will kick this murky corner of property into line."