What The New Letting Agents Redress Schemes Really Mean For The Property Industry

The recent addition of three new redress schemes to the property landscape has drastically altered the relationship of letting agents and tenants. The schemes, which are run by The Property Ombudsman, Ombudsman Services Property and the Property Redress Scheme, came into effect on the 1st of October 2014. So what exactly do they do, and how will the industry as a whole be affected?

What are they?

The purpose of these letting agents redress schemes, according to the UK government, are to protect the rights of tenants, and help to “ensure tenants have a straightforward option to hold their agents to account”. They have been introduced as a defence against unscrupulous behaviour by agents, after instances of bad behaviour including the charging of excessive fees and using false, confusing and misleading advertising as a way of luring potential tenants in. Another reason for the implementation of these schemes is the growing problem of ‘revenge evictions’, in which tenants are unfairly evicted from their homes after making a complaint about the living conditions. So far, it seems fair, right? Well, that’s not the view of everyone in the industry.

The downsides

An increasing number of individuals are frustrated at the Government’s plans to introduce these schemes, believing that the property industry is being changed in a way that is not necessarily for the better. These redress schemes are seen as vague and ineffective, giving the tenants little rights in the case of events such as revenge evictions, in which case they are not actually protected by law. Yes, the threat of having to pay out a large sum of money compensating tenants may scare some agents – but for some, it’s simply business as usual. Agents must effectively communicate these redress schemes to tenants, otherwise they will be unaware of any changes that have been made. For some, there is a real fear that the agents who are letting down the industry will simply sign on the dotted line and carry on as normal. For a scheme that’s supposedly changing the industry beyond recognition, there is little faith amongst some that it’s going to do any good.

It’s not all bad

However, these doubts could be turned around. Alongside the schemes, there is more work taking place to protect the rights of tenants. Local councils will be offered much more help and guidance on how to stamp out shady landlord practices and to do their best to protect tenants from illegal eviction. In the event of something like this still happening, the councils will be advised on how to push for harsher penalties before magistrates.

The property game is changing

Taking both views into account, it’s clear that these new schemes are changing the property industry in a big way – although whether this is for better or worse depends entirely on who you speak to. The good part of the deal is increased rights for tenants, with the downside being the lack of solid legal protection for them. These new schemes do show that change in the industry is being encouraged, and this is just the start. It’s worth adding that the majority of letting agents operate in a way that is legal, so as long as your agency is reputable, your rights are going to be protected. For those that are in doubt about their agents though, these new schemes provide a place where they can take their complaints – and that is the start of a very big change of the industry indeed.

Michael Low is the Director for the leading lettings and estate agents Balgores Low in Chelmsford. Michael always makes himself available for all of his clients to answer any questions regarding the Redress Scheme.