Crackdown on rogue letting agents launched

3 April 2018

Almost nine million private tenants and leasehold homeowners in England will benefit from more protection from unscrupulous rogue letting and managing agents, according to new government proposals.

A new mandatory code of practice to protect renters and leaseholders from rogue agents flouting the law through unexpected or deliberately vague bills or poor-quality repairs is planned

Under this, letting and managing agents will need to obtain a nationally recognised qualification to practise, with at least one person in every agency required to have a higher qualification.

In addition, a new independent regulator responsible for working practices of agents will be set up with strong powers of enforcement for agents who break the rules, with agents who fail to comply banned from trading. Those who breach the code could also face criminal prosecution.

Other proposals include:

·       a new system to help leaseholders challenge unfair fees including service charges;

·       support for leaseholders to switch their managing agents where they perform poorly or break the terms of their contract; and

·       a requirement for all letting and managing agents to undertake continuing professional development and training.

The new code will be developed by a working group comprising representatives of letting, managing and estate agents, tenants and regulation experts, which is expected to draw up its final proposals in early 2019.

The group will also look at unfair additional charges for freehold and leaseholders and whether they should be capped or banned. This includes the use of restrictive covenants, leasehold restrictions and administration charges.

Housing minister Heather Wheeler says: “Most property agents take a thorough and professional approach when carrying out their business, but sadly some do not. By introducing new standards for the sector, we will clamp down on the small minority of agents who abuse the system, so we can better protect tenants and leaseholders who find themselves at the end of a raw deal.”

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    The government has also brought forward changes to privately held Client Money Protection schemes for letting agents, with civil penalties of up to £30,000 for agents who fail to comply with the scheme. This mandatory scheme will ensure tenants and landlords are reimbursed if their letting agent is fraudulent or goes bankrupt.

Around 60% of agents had signed up to the Client Money Protection scheme, while it was voluntary.

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