Landlord Knowledge - The Home of Savvy Buy to Let Property Investors

More Research and More Legislation for Letting Agents

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I really enjoy the research I do to enable me to come up with items for Landlord Knowledge.  The reading, the google searches, the conversations I have in helping landlords and with the landlords I consider my friendly experts, to clarify how the changes that are implemented are working for, and against, them. 

Perhaps it is a sign of how much research and effort I put in to keeping on top of issues that I find there are instances when I experience déjà-vu – surely, this has happened before?

I felt this strongly when I read that the Government wanted to introduce more legislation to ‘crackdown on rogues’, but in this case, rogue agents, not rogue landlords.

A mandatory code of practice and new regulator are to be introduced; surely, this, or something similar, had been introduced before, and for the same reason? Were these additional measures, and if so, why weren’t they introduced at the same time as the ones that seemed to be flitting in and out of my memory? This would not only have saved money, saved parliamentary time and saved landlords the problems that can arise when properties are left to a disreputable agent to manage.

Let’s see what the research of Sherlock Sharon re-discovered.

Since 27th May 2015, agents have been required to display in their premises that they belong to a Client Money Protection (CMP) scheme. It was mooted that this would give landlords a choice in which agent they used, based on whether they belonged to a CMP. I may be naive, but could someone explain how there is any choice, if an agent is required to register with a scheme? Like much legislation, it is perhaps not policed as much as relevant legislation should be?  

Since 4th April 2017, it has been mandatory for agents to belong to a CMP scheme. Mandatory rather than a requirement? Strengthened and necessary, as it is believed that £2.7 billion is held by agents at any one time – BUT – it is estimated that £700 million is still not protected. There is still a long way to go, though there has been legislation in place since 2015.

What will the new steps be? Well, there will be:

A New Code of Practice                                                                                                                                        

Agents will have to obtain a nationally recognised qualification with at least 1 person in every company holding a higher qualification; this is something that could benefit the sector. I hear of too many agents who are not aware of the law and therefore advise their landlord clients very badly. A lot of people look at private renting as a very easy way to make money; it is not. Only the very best agents make it look easy, but that doesn’t mean that has not been by very hard work, studying, attending training. 

Independent Regulator                                                                                                                                                   

A new independent regulator will be given strong powers to enforce where rule have been broken; agents that do not comply will not be allowed to continue their business. Where there is a serious breach, there could be criminal sanctions.                                                                                                                   

CMP Schemes

Privately run CMP schemes will be introduced and there will be a maximum penalty of £30,000 for non-compliance by agents. Agents who receive fines for non-compliance would not be allowed to continue to hold client money.

I hope this works; it sounds as though it should, but if I research in another two years, will I be reading of further measures, because those of 2015, 2017 and 2018 are still not being acted upon and landlords (and tenants) are still victims of agents who don’t really want to provide the service that landlords pay for?

For advice on buy to let issues – General Knowledge