I wonder how many landlords answer ‘yes’ to this question when, in fact, they do not really know or even understand what being ‘regulated’ means or, even more importantly, how using a non-regulated agent can be very risky.
This morning The Annual Report of The Property Ombudsman (TPOS) was published and stats showed a rise of 23% in complaints about letting agents (published 15th April 2014) compared to last year, so I wanted to give a quick guideline on what being ‘regulated’ means and how a landlord can find out whether their chosen agent is or is NOT regulated:
THE PROPERTY OMBUDSMAN SCHEME (TPOS)
Membership of the scheme (as at 31st December 2013) was 13% higher than last year, currently 10,903 letting agency branches are members. TPOS is an independent redress scheme available to all UK companies who deal in lettings & property management. Whilst it is a legal requirement for all sales branches to be registered with an independent redress scheme it is not a mandatory lettings requirement unless the agent is a member firm of The Association of Residential Letting Agents (ARLA).
You should always check if your letting agent is a member of TPOS before signing their Terms of Business and giving your instructions ot let your property, if you want a place to make a complaint with a fair hearing, should something go wrong. To give an example, in the past year TPOS handled 10,179 complaints against letting agency firms, 358 of those complaints went on to mediation and 915 were the subject of a formal review, with 79% of these claims supported:
The Property Ombudsman Scheme (TPOS) for Sales, Letting & Commercial, can be contacted on 01722 333306 or by visiting the website www.tpos.co.uk
The powers of The Property Ombudsman allow Chairman Christopher Hamer to make awards of compensation for financial loss and/or aggravation, distress and inconvenience, where it is felt that is appropriate. The service is free of charge for the public. The Property Ombudsman is able to consider disputes referred by landlords or tenants and relating to lettings and management agents that are members of the Scheme. These agents follow the TPO Code of Practice for Letting Agents.
Disputes relating to repayment of deposits paid by tenants and which are protected by an approved Tenancy Deposit Scheme should be referred to the relevant deposit protection scheme.
An alternate, lesser known scheme is The Ombudsman Services: Property (OS:P) and they can be contacted on 01925 530 270.
THE ASSOCIATION OF RESIDENTIAL LETTING AGENTS
For complete peace of mind as a landlord you should look out for an agent displaying the above Licensed Member logo. In order to become a member of ARLA staff must pass a competency exam and carry out continued professional development to enusre they are up-to-date with the ever chnaging world of lettings legislation. By clicking here or on the above logo you can search the ARLA Membership to ensure that your chosen agent is listed.
Aside from the benefits of dealing with qualified members of staff, using an ARLA member firm will give you peace of mind that your client money is safe, is untouchable and is not going to disappear to a beach in the Bahamas if your chosen agent so wishes.
To be an ARLA member you need to prove:
You have a designated, ring-fenced client account
Designated Client accounts cannot be used for anything other than clients funds as if a company falls into financial trouble, the banks cannot access the money to cover the company’s debts.
If you are a Principal, Partner or Director (PPD) member of a property company which handles client money, then you must produce on application, and thereafter within 6 months of your financial year end, an Accountants’ Report (of the client account). The ARLA will only accept an Accountants’ Report which has been completed and signed by a chartered or certified accountant who is a member of one of the supervisory bodies which are recognised by the Financial Reporting Council’s Professional Oversight Board for Accountancy. These are:
- Institute of Chartered Accountants of England and Wales (ICAEW)
- Association of Chartered Certified Accountants (ACCA)
- Association of Authorised Public Accountants (AAPA)
You hold Client Money Protection (CMP) insurance
All Principals, Partners and Directors whose company handles client money are required to hold Client Money Protection. The ARLA scheme is designed to reimburse clients of members who have suffered financial loss due to the dishonesty of the member and/or their firm. ARLA have given a ‘promise’ to clients of ARLA members that, up to pre-set limits, they will make reimbursement for such losses and they have, therefore, taken out an insurance policy to these same pre-set limits to cover the risk that they have assumed in the ‘promise’ to the clients of members. The only party insured under this policy is ARLA.
For the scheme to operate successfully, it is a requirement of ARLA membership that participating members involved in letting and management already hold Professional Indemnity insurance (PI), simply because PI insurance would be the first port of call should there be any claims. Whilst there is nearly always a fidelity (staff dishonesty) section in a PI policy, that covers pecuniary loss to the actual business (the principals or the policyholder being the insured party) rather than loss of clients’ money – only the Client Money Protection Scheme will deal with this aspect.
In laymans terms, when large sums of money are being handled by your letting & property management agency, can you afford NOT to check whether they are regulared?
FELLOWS OF ARLA
Jane Gardner, Director
Rochelle Latham, Renewals Manager
MEMBERS OF ARLA
Alex Sewell, Director
Jan Sewell, Director
Ben Smith, Lettings Branch Manager
Reagan Bradley, Head of Property Management
Julia Pennell, Senior Negotiator
Donna Waldron, Negotiator
Susan Nethersole, Negotiator
SEWELL & GARDNER
Proud Members of The Property Ombudsman Scheme
The Safe Agent Scheme
The Association of Residential Letting Agents