New rules demanding letting agents should join a redress scheme to handle complaints about bad practise came into force on October 1.
Breaking the rules can have serious consequences – fines of up to £5,000 can be imposed and a conviction might affect a house in multiple occupation (HMO) owner or manager’s status as a ‘fit and proper person’ to hold a licence.
But the rules are unclear and the Department of Communities and Local Government (DCLG) has already released updated guidance only days after the scheme started.
The guidance suggests landlords are letting agents or property managers if they undertake certain activities during the course of their business.
- Landlords are letting agents if they take instructions from a landlord to help find a tenant or from tenants to help them find a privately rented home
- Landlords are property managers if they arrange services, repairs, maintenance, improvement, or insurance or deal with any other aspect of the management of residential premises for another person
- The activities are conducted as a business – which generally means receiving a payment for carrying out the work.
Landlords who are joint owners and manage properties they also own for another person are not letting agents or property managers.
The guidance includes exemptions for landlords with employees and those finding homes for relatives.
“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,” said a DCLG spokesman.
“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.
“Ultimately the requirement to belong to a redress scheme will help weed out bad agents and property managers and drive up standards.”©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.