There are a number of fairly recent regulations that agents need to comply with.
One of them, now just over a year old, is that you need to be a member of a property redress scheme.
Another one is that letting agents must clearly display their fees and also state clearly whether or NOT they have client money protection in place.
This means putting up a notice to that effect. All of these also apply to your website, where this information should be easily found and seen by your customers and potential customers.
I decided to do a little exercise and browsed a variety of agents' websites to see if they had complied with the law in accordance with the guidance provided by the government.
I was shocked to find that, be they large or small, members of trade bodies or not, the number of sites that were complying as prescribed was tiny.
Few showed their fees as required, many failed to show which redress scheme they belonged to and as for client money protection, no site where the agent did not have the cover made the required statement that they did not have it.
Whether or not this is also reflected in their offices, I cannot say, but these agents need to make sure they start complying with the law or else they could be hit with a hefty fine.
Perhaps one of the reasons why the legislation is not being taken seriously is the perception that the law is not being enforced.
Most local authorities were slow off the mark, and it was only when a number of large councils started enforcing and fining, that agents started realising that this could cost them a lot of money or even their livelihood. Also, the fines are virtually un-appealable.
At this point I think it is also worth mentioning that I am not a regulator and will not take any role in enforcing this legislation. But if I as Head of Redress get a complaint regarding fees and the agent cannot prove that they have displayed these transparently and openly to their customers, I will award the amount charged back to them.
Similarly, if the agent does not display that they are a member of our scheme both in the office and on the website, this could result in us taking disciplinary action and the agent having to compensate their customers.
So what does this mean for you? In order to avoid a fine, check that you are already following the advice below or make the relevant changes to do so:
- Ensure that all of your offices clearly display your fees. ARLA have prepared a template for their members, which you can look at as an example of best practice.
- Update your website: even if you do not do a great deal of trade over this medium, remember that if it was easy for me to check those sites that do not comply, it will be easy for the authorities to do so. If you are not sure of what to display, then take a look at our leaflet and the guidance from the Department of Business Innovations and Skills, which can be found on our website.
- Make sure that if you do not have client money protection that you clearly inform your customers of the fact. Alternatively, why not get the cover in place? It is available through various trade bodies but can also be obtained by the agent joining Client Money Protect (www.clientmoneyprotect.co.uk). It costs around £300 a year and membership can be activated within a couple of days. They also will provide you with a logo for your office and website.
Finally why not take advantage of this legislation to promote your business and give you a competitive edge? Show customers that they can trust you and that they are in safe hands with you.
I wish everyone a happy festive period. I will have a new blog in the New Year where I’ll discuss issues that can develop while people are on holiday!
*Sean Hooker is Head of Redress at the Property Redress Scheme