Government has been challenged to reassure tenants by law in making the biggest change to the private rental sector for a generation.
Danielle Cullen, managing director at ClickTenant.com, says where the property sales industry is based largely on the compliance of estate agents “it’s about time we raise the bar for the lettings industry as a whole”
To Cullen, greater regulation of the rental sector is something welcomed and long awaited.
“We need to wipe out rogue letting agents who tend to give the rest of the industry a bad name.
“There are plenty of agents committed to providing a high-quality service, but a more level field needs to be introduced, and trust put back into the public,” she said.
The Tories first announced that the private rental sector would become regulated in October 2017.
This involved consideration as to whether to introduce a new regulatory body to handle managing and letting agents, to best protect and empower tenants.
Government had previously taken steps to protect tenants with the introduction of Redress Schemes in 2013, which encouraged letting agents in the UK to join one of three government approved schemes.
However, the current scheme has been widely condemned due to fundamental underlying problems; the tribunal system can be expensive, uncertain and an intimidating process for tenants, and agents who weren’t signed up to the schemes were only fined up to £5,000 when it became a legal requirement to be registered from October 2014.
The proposed changes to the sector will require all letting and managing agents to become members of a relevant professional body or organisation, which has been approved by government.
Other measures to be considered include whether tenants should have a greater say over the appointment of managing agents, and making the system transparent so that tenants know what they are being charged for, and why.
“There has been growing scrutiny placed on tenants, landlords and letting agents in recent years. We welcome the changes, and a blanket regulation to the whole sector is the correct approach the government should take.
“All parties deserve reassurance that they will be treated fairly throughout the process, no matter which agent they choose to use. The legislative process just needs to ensure that each parties needs are properly considered,” said Cullen.
There are predictions that the rest of the UK will implement similar legislation to Scotland, which includes following the Letting Agent Code of Practice and joining a Register of Letting Agents.
Applications to the Letting Agent Register in Scotland will open in January 2018, and the deadline for all agents to comply with the new legislation is 30th September 2018. Failure to comply with the changes could lead to fines of up to £50,000 and prison sentences of up to six months for those convicted.
The Scottish Code of Practice sets out letting standards, making it compulsory to offer client money protection, professional indemnity insurance, and specifies how client money should be handled.
TA Register of Letting Agents ensures that letting agents have adequate training, and must undergo mandatory updates to comply with legal obligations.
Cullen said the changes in Scotland are probably the greatest step forward in terms of protecting private tenants in the last 10 years.
“The inclusion of fines or prison sentences show how serious Scotland is for protecting tenants, and it’s certainly a good deterrent to potential rogue agents in operating the area.
“We should be seriously considering implementing similar legislation across the rest of the UK, to ensure our system is as transparent as possible.
“The government has now finished collecting evidence on whether a new regulatory model is needed for agents in the private rental sector. We look forward to seeing what changes will be made, and certainly welcome them if they’re going to mirror the Scottish system,” she said.