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Regulation of Property Agents - update for industry expected today

A progress report on the Regulation of Property Agents recommendations will be made today by a key RoPA committee member, Mark Hayward of Propertymark.

Hayward, the outgoing chief executive of the National Association of Estate Agents, will give the update at a Rightmove webinar today.

The Regulation of Property Agents working party last summer produced a series of recommendations including creating a new independent regulator, making sure all agents were licensed, mandatory qualifications and a new code of practice.


These recommendation have been supported by the National Association of Estate Agents, the Association of Residential Letting Agents, the Guild of Property Professionals, The Property Ombudsman and the Property Redress System plus other industry and consumer bodies. 

These recommendations were sent to government well over a year ago - about nine months before the pandemic outbreak - but since then little has been heard about progressing them, with the exception of early discussions on a new industry code of practice.

The Ministry of Housing, Communities and Local Government said earlier this year: "The government is committed to raising professionalism amongst property agents and welcomes the work of the independent Regulation of Property Agents working group, chaired by Lord Best. We will respond to the group's final report following careful consideration."

The main recommendations of RoPA are in detail below:

Scope of new regulation: “We recommend that all those carrying out property agency work be regulated (including auctioneers, rent-to-rent firms, property guardian providers, international property agents, and online agents)” but this regulation will not extend to property portals like Rightmove and Zoopla nor to the Airbnb-style short-let sector.

“However, we recommend that the legislation required to regulate property agents should allow for future extension to the scope of regulation (e.g. to include at a future point regulation of landlords, freeholders and developers – as well as retirement housing managers and Right to Manage companies).”


The new regulator: “We do not consider that an existing body could take on the role of the new regulator. Therefore, Government should establish a new public body to undertake this role. The new regulator should be established and run with regard to general principles of good governance, including: independence, openness and transparency, accountability, integrity, clarity of purpose and effectiveness. The new regulator, through its board, should be accountable to the Secretary of State for Housing, Communities and Local Government. It should publish an annual report on its progress in raising standards of property agents, using agreed key performance indicators – including customer satisfaction …

“We recommend that the new regulator take over responsibility for the approval of property agent redress and client money protection schemes. The new regulator should have the power to appoint a single ombudsman for property agents, rather than competing redress schemes, if they believe this to be the best way of improving standards.”

“The new regulator should be able to consider complaints from all sources. Where solicitors, lawyers or other professionals have evidence of possible illegal agent behaviour, they should be obliged to present it to the new regulator.”


Licensing: “To confirm appropriate qualifications and credentials, property agencies and qualifying agents should be required to hold and display a licence to practise from the new regulator. Before granting a licence, the new regulator should check that an agent has fulfilled its legal obligations (such as belonging to a redress scheme and submitting a copy of their annual audited accounts to the new regulator) – and that they have passed a fit-and-proper person test. We recommend that the new regulator should be able to vary licensing conditions as it sees fit and that it maintains accessible records of licensed property agents.”


Codes of Practice: “Codes of practice set out clear standards of behaviour. The Government has already committed to requiring that letting agents adhere to a code of practice, and we recommend that all property agents be required to do so. There should be a single, high- level set of principles applicable to all property agents which is set in statute: the ‘overarching’ code. Then, underneath, ‘regulatory’ codes specific to various aspects of property agent practice, binding only on those providing these types of services.

“Key principles for the ‘overarching’ code should include that agents must act with honesty and integrity; ensure all staff are appropriately qualified; declare conflicts of interest; and have an effective complaints procedure in place. To develop and maintain the ‘regulatory’ codes, the new regulator should establish a working group for each sector of property agency to work up sector-specific detail.”


Qualifications: “In the new regime, every property agency should be responsible for ensuring their staff are trained to the appropriate level and clear oversight arrangements are in place for junior staff. To ensure levels of qualification are appropriate yet proportionate, the working group recommend that licensed agents should be qualified to a minimum of level 3 of Ofqual’s Regulated Qualification Framework; company directors and managing agents should be qualified to a minimum of level 4 in most cases.”

The new regulator will be expected to develop a system of qualification quality control.


Leasehold and freehold charges: “The new regulator should be given a statutory duty to ensure transparency of leaseholder and freeholder charges, and should work with the sector (property agents, developers and consumers) to draw up the detail of the regulatory codes to underpin this aim as it applies to property agents … We recommend that the new regulator takes over from the First-tier Tribunal the power to block a landlord’s chosen managing agent where the leaseholders have reasonably exercised a veto. We also recommend that the new regulator provides information on managing agent performance to allow landlord freeholders - and where relevant, leaseholders - to make an informed choice of managing agent.”


Assurance and enforcement: “We recommend that the new regulator should have a range of options for enforcement action according to the seriousness of the infringement and how regularly it has occurred. These options should range from agreeing remedial actions and issuing warnings up to the revocation of licences and prosecutions for unlicensed practice.”

“The new regulator and other bodies (such as Trading Standards and redress schemes) will need to share information and work together effectively. There should be a system of flexible working between the new regulator and Trading Standards teams, and the new regulator should set out guidance clarifying their own and Trading Standards’ roles with regards to enforcement action to avoid duplication.”


You can read the full RoPA report here.

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    I am not sure that an 80 year old Baron is the correct person to be formulating the shape of real estate in the 2020's. I am even more sceptical of the government becoming a 'police man' , we have statutes that lay down the rules, and 99% of those doing property are straight, like any other industry, draconian, expensive gated licensing, favours the larger financial interests, which given that the UK agents, well 80% of them are a 'national cottage industry' will put onerous pressure on companies ravaged already by three years on intergovernmental Brexit delay and now the best that is Covid-19.

    If anyone out there in property land or proptech land would like to start the TCF party for the downtrodden, unheard masses of great people who just want to get on with the job they love with the minimum amount of red-tape and often vested interest friction, please message me. 'Transparency, collaboration and fraternity' Vs the chains or regulatory powers forced on a profession that just wants to get on.

  • icon
    • 28 October 2020 13:59 PM

    With all this regulation they are missing out on LL.
    As one I would consider it perfectly reasonable to be required to undergo 35 hours of CPD training at a cost of no more than £400 every 5 years.
    For then a Licence to be granted giving permission to let.

    Any LL without a licence to be forced to use a LA until they have achieved a LL licence.

    No marketing of any letting property without either a LL licence or LA licence.

    A bit like RentSmart wales.

    Obviously before a licence to let could be granted there would need to be some simple checks

    So first one would be to ensure that ANY LL with a mortgage has CTL.

    Next one is to confirm that the lender CTL includes letting to DSS tenants.

    Next one is confirmation of insurance to reflect the current occupant status.

    So for example resi insurance wouldn't be valid for DSS tenants.
    It is breach of all mortgages not to have the CORRECT insurance policy in place.
    Loans could be called in for these reasons.

    If the correct insurance is in place any criminal convictions must be advised by the LL to the insurer as it would be a material fact.
    So that includes things like speeding offences.

    If not advised the insurer that could invalidate any future claims.

    The we have the issues of freeholder permissions.

    Most freeholders only permit single AST occupancies.
    Again confirmation of permission would be required from the freeholder.

    By the time all this has been done there will be about 2 million homeless as many tenancies are fraudulent which thorough licensing checks would detect.
    The 2.5 million illegal immigrants would surely be detected as the certainly don't have the RTR which LL would need to provide proof of every new tenancy
    A robust and effective very hostile environment for any LL failing to comply with licensing arrangements would be most welcome with the ultimate objective of just leaving good LL.

    The price of having just good LL will be millions of homeless but that won't be the fault of good LL


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