Landlords urged to starve out unscrupulous agents

 Thursday 19th July 2012
The Residential Landlords Association has called on landlords to play their part in ‘starving out’ unscrupulous letting agents.

Chairman Alan Ward said: “The RLA welcomes Labour’s policy review of letting agents in the private rented sector.

“Landlords especially have it within their power to supply property only to letting agents which act fairly and professionally, and thus starve out the unqualified, the fraudulent and criminal operators.

“Landlords need to be discriminating in whom they employ as agents and not just take the cheapest offer.

“Equally, it is incumbent on the agents, who are members of professional bodies such as ARLA, NALS and RICS, to make clear their charges at all times to both landlords and tenants. The professional bodies should enforce those policies vigorously through effective self-regulation and therefore avoid the need for unnecessary extra regulation.”

Ian Potter, managing director of ARLA, said: “The Association of Residential Letting Agents has for many years campaigned to have regulation of the private rented sector. We believe it should cover everyone operating in the sector both landlords and agents, as without this there is an opportunity for people to slip through the net. This has proved a difficult conversation in several arenas since the Rugg Review.

“There are in our opinion some key features required to improve the consumer experience, including mandatory recognised qualifications, consumer redress using recognised ombudsman services, client money protection, and the ability to be banned from trading in a fair but robust manner.

“We look forward to being able to contribute to any discussions in the future on designing regulation and making it work.”

The National Landlords Association said it was up to the industry to inspire confidence, and said that landlords should look for agents signed up to trade bodies such as UKALA – part of the NLA.

Chief executive Richard Lambert said: “The NLA believes that landlords and tenants should be able to expect certain provisions when using a letting agency to ensure transparency, fairness and a degree of consumer protection.

“Our advice to all landlords is to look for agencies which have a commitment to Continued Professional Development, comprehensive Client Money Protection Insurance and Professional Indemnity Insurance, and have elected to abide by a respected industry code of practice.

“Currently, these features are only available by means of membership of a recognised trade body such as the UK Association of Letting Agents (UKALA), the Association of Residential Letting Agents (ARLA), National Approved Letting Scheme (NALS) or the Royal Institution of Chartered Surveyors (RICS).

“The NLA would welcome more agencies proactively seeking out these organisations in order to provide the kind of consumer protections and assurances which landlords and tenants need to work and live in the private rented sector.

“However, if the industry can’t provide confidence to its consumers, it has to accept that some form of regulation will inevitably follow.”

London agent Eric Walker said he was exasperated by the report admitting that letting agents, unlike estate agents, operate outside of any legislation, and do not have to be part of any redress scheme.

He said: “Labour were in government long enough when we were campaigning for regulation and duly ignored by eight housing ministers. Labour refused to amend the 1979 Estate Agents Act and omitted this key issue from the Consumer Redress Act. It was THEY who made it mandatory for sales agents to be members of independent redress schemes – and don’t get me started on money laundering.”

He also criticised the use of a case study in the report which criticised an agent for charging a tenant a total of £3,804 in upfront fees. Walker pointed out that this included an inventory, done for the protection of the tenant, and was not an agent’s fee, and also a six-week deposit and a month’s rent.

But he conceded that all letting agents should be transparent and honest about their fees – “just like MPs’ expenses”.

Walker also said the report was not correct in blaming agents. He said: “It is the fault of governments who opt not to regulate, and in doing so, encourage rogues to make hay while the sun shines.”

However, he also pointed out that no amount of regulation would stop deliberate criminality.