Lettings Agents to be regulated for the first time

Lettings Agents to be regulated for the first time

New legislation requiring letting agents to become part of an approved redress scheme has been approved by the government. Pressure from opposition, industry and consumer groups has led to the move, which is designed to give tenants and landlords improved protection against rogue agents.

The letting industry has a turnover of billions of pounds each year, but up to now there has been no mandatory ombudsman scheme for agents, meaning that tenants and landlords have been left vulnerable and unable to seek redress in the event of any problem. Currently, agents can sign up for self-regulation, but an estimated 40% of letting agents are still without any form of regulation at all.

Bad practices within the industry include hidden fees for minor administration, charging both tenants and landlords for the same service and refusing to respond to tenant’s requests for maintenance.

With almost 5 million households across the UK let to private tenants, this is clearly big news for those renting a property or letting their property out. The new legislation is expected to be enforced by autumn 2013, requiring all agents to sign up to the compulsory redress scheme. This will reassure tenants and landlords that rents, deposits and maintenance fees are operating within controlled limits and that in the event of a problem there is recourse to address the issue.

Of course there are some instances where the new legislation will fail to have the desired effect. Not all landlords use an agent, so tenants with private landlords won’t have access to the scheme. Similarly there are also criminals operating in this area who accept deposits and up-front payments from would-be tenants before absconding with the money. Thankfully these cases are far outweighed by the number of honest, professional letting agents who will welcome the legislation as a way of regulating the industry.

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