Easter was a busy weekend for the Government , who whilst we were all busy stuffing our faces with Easter Eggs ,announced three important updates relating to the private rented sector, over the weekend. Belvoir Bedford welcome these changes, which were as follows.
New crackdown on Rogue Letting Agents :
- An independent regulator and code of practice for letting and managing agents.
- Possible prosecution for agents breaking the code, with criminal sanction.
- Letting and managing agents will be required to obtain a nationally recognised qualification in order to practise.
- At least one person in every organisation will be required to have a higher qualification.
- All letting and managing agents must undertake continuing professional development.
- Agents who fail to comply will not be allowed to trade.
The Easter Day announcement also proposes a new system to help leaseholders challenge unfair fees including service charges; and support for leaseholds to switch managing agents where they perform poorly or break the terms of their contract.
The new code will be developed by a working group consisting of agents, tenants and regulation experts and is to be established as soon as possible. Belvoir expects tobe part of this group and final proposals will be completed early next year.
Belvoir have been calling for regulation for many years and have been avid supporters of self-regulation for over 10 years. Belvoir have worked closely with Propertymark for many years and has been developing an online training platform that will be available for all Belvoir offices and staff which will meet the requirements of the new regulation.
Find attached the link to the document released by the Government regarding the crackdown.
Reaction to the Consultation on improving the sector
Introduction of Compulsory Client Money Protection
The Government has officially recognised that the fees ban could result in agents closing down as predicted by Dorian and as published by the Industry Eye on the 25th of October 2017. Belvoir’s boss forecasts that 20% of letting agents will disappear in the next three years.
The Government has announced that Client Money Protection will come into force before the ban on tenant fees to “ensure that client money is not lost” in the instance of any agent going out of business as a result of the ban. Agents without CMP could be fined £30,000. With regards to timescales, regulations will be laid out as soon as parliamentary time allows.
The Government has revealed there were only 117 responses to its consultation last year on compulsory CMP. Most (42%) were from agents, with 22% from tenants and landlords.
CMP schemes will be approved in a similar way to redress and tenancy deposit protection schemes although the legislation will allow the Government to step in and create its own CMP scheme if necessary. Government also made it clear that it will not require agents to belong to a membership body in order to be able to offer CMP.
Enforcement of the CMP requirement will be by county councils’ Trading Standards, but there could also be enforced by local housing authorities. Agents flouting the CMP requirement could face a civil penalty of up to £30,000. However, non-compliance would not be a criminal offence or lead to a banning order.
Belvoir welcomes the Introduction of Mandatory CMP and has made it a requirement of being a Belvoir Franchisee for over 10 years. We hope that this will go some way towards removing the less desirable agents from the industry and help the good agents continue to provide excellent service to both tenants and landlords. Please see the attached link.
We do welcome The Government’s announcement over the weekend and will continue to work with Government and its bodies to support change that makes the Private Rental Sector a fairer and safer place for all involved.
If you are a landlord and have concerns or questions about this announcement, get in touch we are here to help
