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Pressure builds for agents to be licensed with mandatory training

Pressure appears to be building for the recommendations of the Regulation of Property Agents working party finally to be implemented.

It’s now over two and a quarter years since the ROPA working party produced a string of recommendations for the agency industry, including a demand for a new regulator and code of practice, compulsory training and licensing, and significantly beefed up enforcement.

Little has happened so far except the government’s establishment in 2020 of a working group - set up under Labour Baroness Dianne Hayer - with the remit of establishing a code of practice for the agency industry.

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Now Baroness Hayter herself has applied pressure on the government to see if the broader ROPA recommendations will ever see the light of day in legislation.

She asked government spokesman Lord Greenhalgh, in a House of Lords question and answer session, whether the government could give a commitment to implement ROPA.

This was followed up by a question by Lord Best - the chair of the ROPA working party - asking whether the government could commit even to responding to the report within the next six months. 

Greenhalgh said the issue was complex and work on it had been halted by the government because of the pandemic, but that ministers “continue to consider the recommendations in the report.”

Lord Palmer - chair of the advisory board of the Property Redress Scheme - then asked the minister for timing on the appointment of a new regulator, but again this was rebuffed. 

Meanwhile Propertymark chief executive Nathan Emerson - in an interview with Proper PR founder Russell Quirk - says that notwithstanding the government’s inactivity to date, he is optimistic that stricter licensing, regulation and qualification are still moving in the right direction. 

“We you look at people who detract and say we don’t want licensing, we don’t want to go for that … are the people of an age who say do I have to take a qualification, do I want to do that.”

You can see the full 45-minute intervene between Emerson and Quirk here, and below is a summary of the ROPA recommendations issued 27 months ago.

 

 

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.”

You can read the full RoPA report here.

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    The headline for this article could equally have been “Government resists plans to implement ROPA recommendations”. The can has been kicked down the road.

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    Baron Best is 76 not being ageist and has a great deal of knowledge around housing, and I think at some point was in the mix with the Joseph Rowntree foundation, but my question would be, should someone who is, or has been in real estate at the hard end, who understands the complete ecosystem and the real problems it faces in five, ten and fifteen years be looking at this.

    Also the intersection with data, technology and software, which will be forcing its tendrils deeper into the industry as it did with banking and Fintech. It is not so much the regulation of human agents that looms large on the horizon, rather what the shape of estate agency will be in the modern world, and the role of AI, ML and lots of emergent technologies around 5G and satellite technology.

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