The Requirement for Redress
April 30, 2013
The government is making moves to protect renters from the minority of lettings agencies who practice unscrupulous tactics. The current government is looking to amend the Regulatory Reform Bill to make it compulsory for all lettings and management agencies to sign up to an approved redress scheme, such as The Property Ombudsman Service. This would give renters the right to challenge their agent if the need arose.
Under successive governments, agents who let property have been able to operate relatively unchecked. This has meant that a small number of renters have had no avenue of redress should they be the victim of malpractice or unethical behaviour perpetrated by so called “rogue” agencies. The benefit of forcing all lettings and management agents to sign up to a redress scheme means that renters and landlords will have the ability to refer unsolved grievances to an ombudsman service.
Housing Minister, Mark Prisk, made the announcement of the government backed amendment to counter a proposed amendment to the Estate Agents Act (EAE) 1979 that was put forward by Baroness Diane Hayter. The Baroness’ amendment looked to have lettings agents brought within the scope of the existing EAE 1979 act and therefore within the scope of the Consumer Estate Agents and Redress Act 2007 (CEARA), but Mr Prisk believed this would be too restrictive and harm the sector more than it would help those within it.
This move has come about as the government has realised that it needs to make moves to help protect renters after receiving increasing pressure from Labour and industry bodies to increase the levels of regulation.
On his blog, the Housing Minister posted about the change in direction of government policy. The following is an extract of his post which can be found at markprisk.communities.gov.uk:
“…Belonging to a redress scheme, a central recommendation from the OFT, will give a clear route for landlords and tenants to pursue complaints if they don’t get the service they deserve, and weed out the cowboys and rogue operators that give letting agents a bad name.
Redress, not red tape
“Our plans overturned an amendment to the Enterprise and Regulatory Reform Bill, which would have made letting and managing agents subject to the Estate Agents Act 1979.
“We believe that this proposal for full regulation, by Baroness Hayter, was unclear and would have created an imprecise and clumsy tool that created problems rather than solving them…”
Young Group & Young London have long believed that there should be increased accountability in our sector. While the change to the law will give landlords and tenants much needed access to recourse in the event of poor practice, it only offers the consumer support after any harm has been done. This is a step in the right direction, however there is still more to be done to raise standards in the sector, protecting the consumer throughout the transaction.