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TODAY'S OTHER NEWS

Agent Qualifications: ‘Get On With It’ says architect of reform

The author of dramatic reform proposals for estate agents has given a clear message to ministers - Get On With It! 

Lord Best chaired the Regulation of Property Agents working party which last summer produced a series of recommendations: these included creating a new independent regulator, making sure all agents were licensed, mandatory qualifications and a new code of practice.

Contrary to the impression given by some reports, these measures have not been dismissed by the government but they are still awaiting ministerial approval. 

Since the RoPA working group reported there has been one change of Housing Secretary and two changes of Housing Minister - plus a change of Prime Minister. The General Election, Brexit issues and now Coronavirus have taken up substantial government time in the interim.

Now Lord Best has told the BBC: "We need you to get your head around these recommendations and get on with it.”

He has reiterated his belief that agents remain largely unregulated in a world where regulation and transparency permeate many other industries.

He told the BBC over the weekend that acting as a property agent without a licence should be a criminal offence.

He says: ”At the moment anybody can set up shop and the next morning be operating as an agent … They can take quite a lot of money off you... and they aren't regulated …. Lawyers or accountants have proper qualifications and are properly regulated but not property agents.”

Lord Best’s 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. 

All are backing Lord Best’s call for ministers to "get on" with implementing his ideas.

The Ministry of Housing, Communities and Local Government told the BBC at the weekend: "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 issue was discussed on the most recent edition of the Radio 4 programme Money Box - you can listen to it here.

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).”

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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.”

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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.”

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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.”

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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.

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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.”

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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.”

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You can read the full RoPA report here.

  • Andrew Stanton Proptech Real Estate Influencer - Analyst - CEO Proptech-PR

    Given the present government has given over no time for any enactment of RoPA at this time, it may be half a decade before RoPA has any powers if ever. Whilst every profession should have members who are fit for purpose, I am not sure that Richard Best should belittle honest individuals who choose to become estate agents, by saying that they need to be licensed if not they will be criminals.

    And then citing other professions as being paragons of virtues. The prisons of the UK have been home to many solicitors accountants, and members of the house for many decades, so regulation of their activities did little.

    Plainly put, if people have a criminal bias within them then that nature will or may surface in whatever profession or job they take. Most people are straight, but to make them fearful or leave an industry which maybe they have faithfully worked in for 4 or 5 decades due to the whims of a political or 'governing body' which may have a large voice, but maybe does not represent the 35,000 workers within the property industry - is to my mind not a measured option.

    Neither is the charging of estate agents to undertake examinations, prior to there being any changes in legislation. Some feeling pressured to do so, and others doing so in the false belief that the government has already endorsed new legislation.

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