New rules have been introduced by the DCLG inviting letting agents to join a redress scheme, the idea being that tenants and landlords are then protected from shoddy business practices. Unfortunately the rules underpinning the scheme are a bit unclear and already the DCLG has been forced to publish new guidance – and it’s only been a few days since the scheme was launched!
According to the guidance notes, landlords are classed as property managers or letting agents if they undertake particular activities as part of their business. These include:
• If a landlord helps another landlord find a tenant or a tenant find a home in the private rental sector (not including relatives), they are classed as a letting agent
• Arranging services, maintenance, repairs, improvements or insurance (or dealing with any other aspect of managing a residential property) on behalf of someone else makes a landlord a property manager
The scheme is a bit confusing, but further guidance is available.
What is the Point of the Redress Scheme?
The DCLG is keen to drive up standards and filter out bad letting agents from the private rental sector:
“While the majority of lettings agents and property managers provide a good service there are a minority who offer a poor service and engage in unacceptable practices. This requirement will mean that tenants and landlords with agents in the private rented sector and leaseholders and freeholders dealing with property managers in the residential sector will be able to complain to an independent person about the service they have received.”
