Government issues guidance on new redress schemes

08 Oct 2014

The Department for Communities and Local Government has released new guidelines on how letting agents and property managers can adhere to new legislation brought in this month.

What has changed?

As of 1 October 2014, it is now a legal requirement for all letting agents and property managers in England to belong to one of three Government-approved redress schemes. These are:

  • Ombudsman Services Property
  • Property Redress Scheme
  • Property Ombudsman

The service provided by these schemes allows tenants and landlords to complain to an independent person about the service they have received from an agent or a property manager.

What does this mean for letting agents and property managers?

According to a recent announcement, the requirement to belong to a redress scheme only applies to agents carrying out lettings or property management work ‘in the course of business.’ This sort of ‘business’ might involve a private landlord approaching an agent in order to find a tenant, or a tenant approaching an agent in order to find a property in which to rent.

For those agents who joined one of the three redress schemes prior to 1 October, they need take no further action. For those looking to join a scheme, applications can be made online at any of the scheme websites.

What are the penalties for not signing up?

Landlords and tenants will be able to check whether a prospective agent has signed up by visiting one of the scheme websites. Failure to join an approved scheme can lead to a fine of up to £5,000 being issued by a local authority. The letting agent or property manager will then have 28 days to make written representations or objections to the authority, starting from the day after the date the notice of intent was sent.

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Patrick Taylor

Written by: Patrick Taylor an Endsleigh colleague.