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By David Beaumont

Managing Director, Compliance-Matters


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The reality of RoPA – an alternative view on estate agency regulation

We have more regulations controlling the sector than ever before and we have more ‘regulators’ involved in controlling the sector than ever before, so logic says the concept of adding another level of control should be rejected, but it hasn’t been!

Did any organisation oppose it? I don’t recall any, which is surprising, because many agency businesses did not support it at all. I know this is true because I assist and work with many agents to ensure they are compliant and many voiced concerns. Surely, someone should have been standing up to voice those agents’ concerns, if not strongly oppose the proposals.

I would like to think that like all the other proposals it will melt away, because it will be a complete waste of agents’ time and money for little consumer benefit. At worst, it will be a complete disaster; at best, it will lead to a very slight improvement in standards.

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Think back and you will remember that there was no opposition from any of the so-called agency representation organisations. In fact, there was blanket support for RoPA from them all. They were all onboard with it from the start and got involved with it right at the centre.

Make your own decision as to why, but in my view it is quite simple. The two main protagonists Propertymark and RICS are consumer protection organisations. They are not, as many think (and as they like to portray themselves), trade bodies in place to look after the interests of agents.

Basically, they exist to uphold the standards of their members, thus protecting consumers.

Yes, they do many positive things in the interests of their members and yes, those things benefit non-members, but looking after the interests of non-members is not a focus for them.

When you think about them both as consumer protection organisations there are a few things you start to realise. They were set many years ago to promote best practice and high standards in an era where consumer protection legislation was non-existent.

The organisations flourished for many years. They protected consumers by promoting the standards of their members and taking action against members who breached their standards and rules.

Move on to 1990s and the Ombudsman for Estate Agents was set up and consumer protection was gaining momentum. Laws were being brought in to improve agency standards across the country.

The relevance of those two organisations was diminishing. Move on a few more years and property ombudsman schemes had statutory backing and every sales and letting agency had to be a member of one.

Move forward again - more legislation and government approved agency Codes of Practice. Relevance diminishing further.

There is no doubt these organisations, particularly Propertymark, have done a lot for agency over the years, but today consumer protection, and standards of service are controlled by legislation not self-regulation within organisations.

So, how do they retain relevance? They put themselves at the forefront of change.

The area of qualification alone will bring in massive increases in revenue. Every agent will need to ensure their employees are ‘qualified’.

Take a rough estimate of 25,000 sales and letting agency businesses. This is not branches, it’s just businesses. Hundreds of thousands of people employed in the sector. How many people will therefore need to have the qualification? Thousands will need level 3 qualification.

Principles, directors, partners, managers needing level 4 qualification as well. Add to that the CPD that will be continually needed and perhaps we can see one reason why RoPA was supported!

You might be surprised that someone who runs a property professional compliance business would be opposing the tightening of standards within agency. Well, I am not opposed to that. What I am opposed to is RoPA, because it will not be what it appears to be.

We have more regulators than ever in the sector, but there is less and less  ‘enforcement’ across the board from local authorities. Mainly because of government cut-backs, funding restrictions and importantly because local authorities do not place agency legislation enforcement high on their consumer protection priority list. That will not miraculously change due to ROPA.

• Trading Standards
• NTSELAT
• Environment Health
• Planning Departments
• Housing Departments
• 3 x Deposit Protection Schemes
• HMRC (money laundering)
• HMRC (absent landlords)
• The Competition & Markets Authority
• TPOS
• PRS
• Immigration Department
• 6 x CMP Schemes
• HSE
• Advertising Standards Authority

In my view, lack of enforcement results in poor compliance. This is illustrated clearly and simply when you look at money laundering enforcement.

Prior to HMRC taking it on, compliance was non-existent. Now compliance is every agent’s highest priority. Why?  Because HMRC have a pro-active enforcement policy. They visit agents and issue penalties, some very large. It’s not rocket science.

The introduction of a new regulator with new codes of practice will not change the level of enforcement. There is no doubt about that. The enforcement agencies do not have the means or the incentive to increase enforcement. New funding will not miraculously appear for any of these agencies and so compliance will not improve.

I might be wrong. Improved enforcement might happen. The new Regulator might end up with enforcement powers and thus employ officers to go out and enforce.

Where will the money come from to finance enforcement? Your licence fee, of course. So, it will be significant to say the least, not to mention the training and qualification fees that will be required.

*David Beaumont is managing director of Compliance-Matters,  providers of online compliance training, documentation, support and assistance in all areas of agency compliance. 

  • Andrew Stanton CEO Proptech-PR    Proptech Real Estate Influencer

    Much truth, much apathy.

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