Key Benefits of a Lettings Agents Ombudsman

Key Benefits of a Lettings Agents Ombudsman

In a move to bring tighter regulation to the lettings industry, the government has proposed new changes. The Housing Minister Mark Prisk has approved an amendment to the Enterprise and Regulatory Reform Bill. The aim is to try and bring more letting agents under regulatory controls and in turn protect landlords and tenants from unscrupulous business practices.

All agents will now be obliged to be registered with a redress scheme approved by the government with the ability to investigate complaints thoroughly and implement compensation programmes. It is hoped the new scheme will seek to impose greater controls on agents who fail to act professionally and bring the industry into disrepute.

Protection from bad practice

Some agents engage in extremely unprofessional practices, overcharging landlords and creating huge problems for tenants. Despite the moves from the government no formal schemes will be in place for a few months, so it is worth checking that letting agents are members of an ombudsman scheme. When the legislation comes into force, all agents will be required to register under a scheme.

Landlords should beware of any agents who are not members of a redress scheme, even when the ombudsman procedures are in place. Doing business with an unregulated agent means that landlords will not be able to seek redress and sort out problems that arise, no matter how serious.

An ombudsman scheme could also offer redress when agents have not used the most competitively priced workmen to repair and maintain the property. Some agents do not shop around and instead use tradespeople known to them even though they charge high rates. The scheme may not be able to prevent this happening but could possibly offer compensation afterwards.

One of the key benefits of a letting agents ombudsman scheme is the redress it offers landlords and tenants. Previously if an agent was not a voluntary member of an ombudsman scheme then there was no scope for complaint or compensation. The proposed changes do not go as far as covering greater financial protection and indemnity insurance, so legislation still has a way to go until the industry is fully regulated.

Far-reaching reform needed

It may be some time till the industry is regulated to an extent that will protect landlords completely from unethical agents. Introducing compulsory ombudsman schemes for agents however, is certainly a positive move towards improving the system. But more pressure is expected to be exerted on the government to ensure changes become more far-reaching and comprehensive.

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