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Redress Schemes for Letting Agents – deadline to sign up 1 October 2014

From 1 October 2014 anyone carrying out “lettings agency work” operating in England must belong to a government authorised redress scheme or face a fine of up to £5000.00.

Who does it apply to?

The Enterprise and Regulatory Reform Act 2013 s83 provides:

S83…….

(7)In this section, “lettings agency work” means things done by any person in the course of a business in response to instructions received from—

(a)a person seeking to find another person wishing to rent a dwelling-house in England under a domestic tenancy and, having found such a person, to grant such a tenancy (“a prospective landlord”);

(b)a person seeking to find a dwelling-house in England to rent under a domestic tenancy and, having found such a dwelling-house, to obtain such a tenancy of it (“a prospective tenant”).

(8)However, “lettings agency work” does not include any of the following things when done by a person who does no other things falling within subsection (7)—

(a)publishing advertisements or disseminating information;

(b)providing a means by which—

(i)a prospective landlord or a prospective tenant can, in response to an advertisement or dissemination of information, make direct contact with a prospective tenant or (as the case may be) prospective landlord;

(ii)a prospective landlord and a prospective tenant can continue to communicate directly with each other.

With regards to property management work:

S84……

(6)In this section, “property management work” means things done by any person (“A”) in the course of a business in response to instructions received from another person (“C”) where—

(a)C wishes A to arrange services, repairs, maintenance, improvements or insurance or to deal with any other aspect of the management of premises in England on C’s behalf, and

(b)the premises consist of or include a dwelling-house let under a relevant tenancy.

(7)However, “property management work” does not include—

The section goes on to define “relevant tenancy” as an Assured Tenancy ( of which Assured Shorthold Tenancy is a subset); a Rent Act tenancy, and residential long leases. Commercial leases are not relevant tenancies.

In short, if you are a lettings agent, a relocation agent, or a property management agent then the rules apply to you and if you are not already a member of a scheme you have a fortnight from today to do so.

Newspapers that carry advertisements, web portals which facilitate landlords and tenants finding each other directly are not considered to be carrying out “lettings agency work”, nor does the definition apply to things done by a local authority.

Currently there are three schemes:

The Property Ombudsman   http://www.tpos.co.uk/

Ombudsman Services – Property    http://www.ombudsman-services.org/property.html

Property Redress Scheme   www.theprs.co.uk.

Agents should also be aware that in order to comply with the  Consumer Contracts (Information Cancellation and Additional Charges  Regulations 2013  the name and details of any redress scheme be given to consumers before any contract is entered into. The information should be given either in the terms of business or separately but before the contract is concluded.

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