Compulsory PRS Regulation
The proposal for a regulation, which came as the organisation organised its yearly week of conferences and events, is aimed at promoting basic standards of professionalism and tackling rogue agents. ARLA’s paper outlines the case for compulsory regulation and why it believes this is necessary. The organisation says it “beggars belief” that, while the energy industry, for example, is regulated, the property sector in general, but particularly lettings, is not.
Yet people generally spend much less on gas or electricity than they do on their monthly rent.
It says: “Many agencies are failing consumers – the time has come to do something about them.” The organisation’s report stresses that while most letting agents do behave professionally, and have the interests of tenants and clients at heart, this is spoilt by a minority of agents who don’t meet basic standards.
Common problems include:
- Failure to give tenants a safe environment
- Failure to maintain properties to let
- Failure to safeguard clients’ money
- Wrongful advertising of properties
ARLA has its own licensing scheme for members and is now proposing a single industry regulator to oversee and audit “accredited” industry organisations across sales, lettings, management and landlord sectors. Accreditation from one of these bodies would then become a legal obligation for all landlords and agents.
Each accredited body would have its own licensing scheme, while landlord bodies would run landlords’ registers and promote best practice. Licensing would be based on qualifications, provision of client money protection, external client account auditing, professional indemnity insurance and a code of practice.
ARLA believers Property Ombudsman Christopher Hamer would be placed to take on the mantle of the industry regulator, and last month Hamer used his 2012 annual report to renew his own call for official regulation of letting agents.
The professional body for UK letting agents also believes that a single government department (it suggests the Dept for Communities and Local Government) should have ultimate responsibility for the property sector. The Residential Landlords Association (RLA) agrees with ARLA on agent regulation while insisting there should be a distinction between commercial businesses and landlords with just a few properties on their books.
Drummonds are in favour of regulation in order to protect the interests of Landlord and tenant though careful thought needs to be given to avoid damaging the much needed supply of rentals. As members of ARLA and The Property Ombudsman we believe everyone in the industry should be qualified to offer a professional service that can be of benefit to the wider community.