Property 'black sheep' walks back into the fold

Robert Jordan, Chairman of letting agents, Jordan's discusses the introduction of the new licensing scheme introduced by ARLA and the impact it will have on agents

It’s been a long time coming but ARLA has finally introduced a licensing scheme for its members. ARLA lobbied the government for 15 years to establish higher industry standards in a sector they referred to as the ‘black sheep’ of the property market. It’s been suggested that hundreds of thousands of pounds of tenants’ money is lost each year to unprotected, unethical letting agents.

Unqualified agents have also been failing to advise landlords correctly, for example about their legally-required deposit protection responsibilities, which can result in a loss of the deposit for tenants or a fine for landlords.

The new scheme, introduced in May means ARLA members now have to be licensed as part of their membership. Agents must abide by a strict code of practice and ensure they have client money protection schemes in place to protect all tenant and landlord funds. They are also required to belong to a redress scheme, giving the public an independent body to complain to.

Novice agents Due to the slump in property sales in the recession, there has been an increase in estate agents marketing themselves as lettings agents without any real skills or knowledge of the sector. This has resulted in a loss of money for an increasing number of people due to the lack of client money protection.

The risk is that non qualified agents do not have bonded client accounts and therefore clients could lose money.

Bonded accounts give protection to tenants and landlords by ensuring deposit and rent money is held in a separate bonded account.

Tenants and landlords should be wary of working and handing over any money to an unqualified agent. They should be an ARLA member and have a bonded or secure deposit scheme in place.

Safety Unqualified agents may not only be putting money at risk but also the safety of their tenants. Around 30 people die every year in the UK through poorly installed or badly maintained gas appliances and flues resulting in deadly carbon monoxide poisoning.

Changes in gas safety regulations introduced in April 2009 once again highlighted the seriousness of the situation. Now gas professionals have to be registered with the Gas Safe register, which has replaced Corgi.

Managing agents and landlords face charges of manslaughter for non compliance of the Gas Safety Regulations and courts can impose custodial sentences but there will always be those who try to cut corners in order to save money.
By law, tenants must be provided with landlord gas safety records annually, which should be received and checked and kept for a minimum of two years. Until presented with these documents tenants shouldn’t even consider renting a property.

Choose carefully In the past, tenants have chosen to rent through whichever agent offered the best property at the time and landlords would plump for an agent offering the lowest fees. In the current climate, however there’s more risk involved and it’s down to tenants and landlords to carry out appropriate research before parting with any money.

The ARLA licensing scheme is long awaited as the rental sector has suffered from a lack of regulation and protection for tenants for too long. The government’s recent consultation on the licensing of landlords and letting agents follows the ARLA principals almost to the letter. It is to be hoped the legislation will not fail for lack of government time. In the mean time landlords and tenants can ensure that they are dealing with a reputable company if they choose to rent through an ARLA licensed letting agent.

Robert Jordan
For further information: Please contact Managing Director William Jordan on 01625 445 770 or visit jordansrentals.com.