Benefits of a Safe Agent

The Royal Institution of Chartered Surveyors (RICS) warned in a recent report that regulation of the lettings sector is needed to stop rogue agents turning it into "the property industry's Wild West". RICS said its research highlights the risks of unscrupulous lettings agents cashing in on the rental boom amid "a total lack of effective regulation".

Demand in the rental sector continues to increase because people are unable to buy their own home, either because they cannot raise the deposit needed or meet lenders' toughened borrowing criteria in the difficult economy, which has pushed up the cost of renting. RICS warns that it is currently possible for people to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process and it is not compulsory for them to conform to codes of conduct.

Several calls have been made for better protections for tenants in the private rental sector in recent months, with Shelter reporting in September that almost a quarter of people feel they have been "ripped off" at some point by letting agents' charges. Around 23pc of people surveyed by the housing charity believed they had been landed with unfairly high fees for aspects of renting such as credit checks, renewing contracts and "administration". Shelter said it had found cases of renters being charged more than 150 for repeat credit checks every year. It said some people were being charged 100 just to view a property and renters were being charged up to 540 in non-refundable "administration" fees.

Peter Bolton King, global residential director for RICS, said: "A good lettings agent can be worth their weight in gold for both landlord and tenant. Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges. What we would like to see is the Government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable."

RICS found that while the vast majority of tenants surveyed said they were satisfied with their lettings agent. There was some confusion over agents' legal requirements, with four out of five renters believing that agents are required to abide by a Government, ombudsman or regulatory body code of practice. Some 87pc of tenants surveyed supported the call for a single compulsory regulation scheme for all lettings agents.

The consensus seems to be that whilst most letting and management agents provide an important service and act responsibly too many others are engaged in unscrupulous practices. The view is that while estate agents, who hold very little money on behalf of their clients, are regulated, letting agents who hold significant sums on behalf of landlords and tenants are not. This opinion echoes the view of all responsible authorities within the sector.

Housing Minister Mark Prisk said: "People living in private rented homes deserve to be treated fairly and honestly. We are determined that all tenants receive a good service, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants. That's why we have strongly backed industry-led schemes such as SafeAgent."

Mr Prisk said that lettings agents are already subject to consumer protection legislation and any tenants who have suffered from poor practice should report the problem to their local trading standards officer or the Office of Fair Trading (OFT). He added: "I would urge anyone wanting to rent or let a property to look for approved agents so they can be confident they will get a secure and good quality service."

The SafeAgent Logo denotes letting agents who have agreed to meet defined standards of customer service including Client Money Protection and a customer complaints procedure offering independent redress. Client money protection schemes pay out in the event of the agent going bust or misappropriating money that has been handed over as a deposit or rent.
Membership is voluntary, but the government hopes promotion of the SafeAgent mark will encourage more to join and make landlords and tenants aware of the safeguards available.

Parkinson Property

12th December 2012


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