It is now a legal requirement for all lettings agents and property managers in England to belong to one of two approved government redress schemes.
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. The aim of the scheme is to eliminate poor practices by letting agents and improve the industry standard to comply with the published Code of Practice.
The Law
The Order (The Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014) has been made as part of the Government’s proposals for improving standards in the private rented sector.
The Enterprise and Regulatory Reform Act 2013 basically requires persons involved in two types of property work to be members of a redress scheme:
- lettings agency work; and
- property management work
Letting agents
A person who engages in lettings agency work must be a member of an approved redress scheme to deal with complaints in connection with that work made by a person who is, or has been, a prospective landlord or a prospective tenant. The scheme will apply to prospective tenancies which are assured (including assured shorthold tenancies), which are to be granted by a private sector landlord. Companies will not be able to seek redress under a redress scheme.
For the purposes of the Order, lettings agency work is defined as things done by any person in the course of a business in response to instructions from either a private rented sector landlord who wants to find a tenant, or a tenant who wants to find a property in the private rented sector.
Property managers
A person who engages in property management work must be a member of a redress scheme to deal with complaints in connection with that work.
Unlike for lettings agency work, the Order does not define the type of complaints in relation to property management work that the redress schemes must consider.
Property management work is categorised as things done by a person in the course of a business in response to instructions from another person who wants to arrange services, repairs, maintenance, improvements, insurance, or to deal with any other aspect of the management of premises consisting of, or containing, a dwelling-house let under either a long lease, an assured tenancy or a protected tenancy.
A leaflet for Lettings Agents and Property Managers provides information about the requirement and who it applies to. It is designed to cover the most common situations but it cannot cover every scenario. It is your responsibility to ensure that you are a member of a scheme if you need to be.
Further information can be found on the GOV.UK website.
The two approved schemes are The Property Ombudsman and The Property Redress Scheme. They will offer independent investigation of complaints about hidden fees or poor service. Where a complaint is upheld, tenants and lease holders could receive compensation.
The contact details of these Schemes are as follows:
| Scheme | Contact |
|---|---|
| The Property Ombudsman Scheme | 01722 333306 |
| The Property Redress Scheme | 02082 757131 |
Letting Agents and Property Managers who have joined the ‘redress scheme’ are required to:
- Provide a copy of their redress scheme certificate to Sefton Council either by completing our online Redress Scheme form, by emailing to private.housing@sefton.gov.uk or by post to Housing Standards Team, Sefton Council, 3rd Floor, Magdalen House, 30 Trinity Road, Bootle, Liverpool, L20 3NJ.
- Advise your clients that you are a member of a particular scheme and how they may make a complaint if a dispute with your agency is not resolved’.
If you are a Letting Agent or Property Manager and do not join a government authorised consumer redress scheme you can be subject to a £5,000 fine from the local authority, if you continue to breach your legal requirement to join such a scheme.
After joining a scheme you must comply with the scheme's Ombudsman decision as failure to do so may result in you being removed from that scheme. This may then result in you being unable to join another government authorised consumer redress scheme.
If you are a landlord or tenant and you want to know if your agent is a member of a scheme please contact the Private Sector Housing Standards Team on 0151 934 4446.