A 26% rise in complaints against letting agents last year has prompted the Ombudsman to demand that something is done urgently to protect consumers and support decent operators in the industry.
In 2011, there were getting on for double the number of complaints about letting agents than sales agents: 7,641 about the former, compared with 4,186 for the latter.
Although sales complaints did go up, by 9.5%, they reduced as a proportion of the overall complaints. Most of the complaints (two-thirds) were from sellers, many of whom were having difficulty selling their properties.
Noticeably, by far the largest number of complaints against letting agents came from London and the South-East, contributing 52% of overall complaints.
The biggest single cause of lettings complaints was complaints handling by the firm itself, followed by communications failure and deposit disputes.
For sales, the biggest single cause of complaints was communications failure, followed by complaints handling, sales particulars and commission fees.
This morning, Christopher Hamer proposed the formation of an industry council to develop and promote overall standards within the lettings industry.
He also called for all the industry bodies to ‘pull together’ and for the Estate Agents Act to be amended to take account of the lettings sector.
The council would also “seek to ensure that consumers understand why they should avoid letting agents who refuse to follow a set of industry standards, such as the TPO Code of Practice, and who do not seek out membership of recognised industry bodies such as ARLA, NALS or RICS”.
Hamer said his office dealt with 7,641 letting inquiries last year – 55% from landlords. More than 25% of the complaints concerned agents not registered with the Ombudsman scheme, meaning that consumers’ only redress would be to take costly legal action.
He described this as “a daunting prospect in the current economic climate”.
Hamer, who publicly supports the SAFEagent scheme, acknowledged that the Government has set its face against regulating letting agents. But he said a new industry council could get key messages across to consumers.
However, he added: “Getting that message across can only be achieved by the bodies pulling together so that it is made obvious to consumers which firms remain intent on operating outside of industry-approved standards.
“The Consumers, Estate Agents and Redress Act 2007 required all sales agents to register with a redress scheme.
“Since then, my office has seen a year on year improvement in standards relating to sales agents.
“If letting agents were compelled by law to register with a redress scheme, I believe that standards across the lettings industry would improve in a similar way.”
He said that letting agents should be included in the Estate Agents Act 1979 by a simple redrafting of one phrase, so that all forms of tenure were embraced. That would mean that all letting agents, like sales agents, would have to belong to a redress scheme.
By the start of this year, 11,504 sales offices were registered with TPO (an estimated 93% of the market), while 8,701 lettings offices were registered – an estimated 60% of the market.
Last year, TPO dealt with 7,641 lettings inquiries. Of those that went on to be examined, the Ombudsman found in favour of the complainant in 67% of cases. This compared with a figure of 56% of sales cases where he found in favour of the complainant.
The lettings awards were also larger, in 79% of cases topping £1,000 – “indicating the greater significance of their effects”.
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Comments
The tpo and guilds do no checks whatsoever on details they are supplied with by agents and thus add unhelpful authenticity and a sense of legitimacy to rogue single traders when landlords reviewing who to use.
Rogue traders are voluntary participants of industry schemes. A fact I discovered too late! So once they have stolen rental funds they quit the scheme and then disappear. Except its not classed as theft and there is no chance of getting it back until you go to small claims, which is not worth the legal expense and solicitor will agree payment which will not be forthcoming. And besides its not even theft it is classed as a civil matter unless you can prove otherwise, again not likely without legal expense and pointless if sole trader "gone bust". My deposits scheme no protection ref deposit either from a rogue agent. Tenants ok but landlord culpable again. What a set of failing industry arrangements!
NFoPP and NALS are there to do thier thing but are not a redress scheme, don't actually regulate or administer anything but will schmooze anywhere it might seem important to schmooze.
NALS - just a bit of a mystery really, have enough time on their hands to do the admin for SAFE
TPO- insurance broker
SAFEAgent, not a Professional body, not a redress scheme no ambitions to do either.
Let us have 3 or 4 organisations all who want to appear to have the moral high ground yet none of them do. Let us send an ambiguous message to the public just to confuse eveyone, lets not have a clear idea ourselves who is who and who does what.
Desp[ite claims here of a lack of ambition from Safe Agent it seems obvious to put a sythe through the adminsitration of 4 bodies and create one single body that incorporates the best bits from all of them. A good starting point is to do exactly what Steve Lander thought was happening.
A NALS/SAFE alliance with an CMP insurance product and a rigid code of practice and then the job will be done. Leave NFoPP to plough an increasingly wonky and lonely furrow and provide TPO with a bit of competition.
@ Honest Truth - You obviously don't know Chris Hamer then. If you did, you wouldn't say that & as you clearly don't, your opinion is little more than an unfounded snipe.
I have met him on a number of occasions and he is a charming, professional man who holds high standards at the heart of what TPOS does.
Have you been fined recently?
@SE1Agent
'I spoke to Chris Hamer at the ARLA conference and he really impressed me'
I wouldn't call you a good judge of character then.
Nicely put Mikey - I have to also say that having hear the Ombudsman speak on 3 occasions, I think he is brilliant.
So what if the TPOS Limited makes money? Its an excellent service. Personally, they should charge the complainant (refundable if supported) - make more money and reduce workload from the 'its worth a try' brigade.
"SAFEagent is really NALS dressed up in different clothing."
Er, no its not. Its run by at least 8 agents (my boss is one) who aren't all even NALS members. - They all put money in to get it off the ground. NALS do the admin and help with PR and offer advice - but separately from NALS
I can honestly say that he is trying to do something he really believes in and does it because he and all of us are fed up being tainted by the rogues, crooks and idiots.
@Mark Alexander - I agree - there are differences in CMP. I mentioned this to SAFE at the ARLA conference.
The reply was blunt - but fair "When you get pulled over by the Police and they ask for your insurance they don't comment on where you have free breakdown cover, replacement vehicle or legal protection - they just want to know if you are insured"
Its a fair point. The fact an agent HAS insurance and subscribes to a voluntary code of practice when they are not legally compelled to do so says much about the agent.
I dont know why TPOS simply says - you are either an Ombudsman Member or not. If you are, and you do lettings, then you are required to be part of the lettings redress as well. Sorted.
@ray evans.
Mmmmm. Interesting comment and one I pursued. I found out the following from conversations with 2 SAFE people at the NALS conference.
CMP is paid up front. A PPD with membership of a regulator operates a firm who has CMP and qualifies for SAFE - the only way this ceases is if the member is a) expelled from his respective organisation or if b) they resign.
a) this takes forever and even if a disciplinary issue arose early in the year, by the time Arbon House have dealt with it, the agent may have retired anyway
b) Few resign - rather they don't renew and claim they have resigned.
Members of NALS who have CPM through NFoPP, RICS etc will have their membership of NALS terminated should they leave the CMP Providers membership - as will membership of the TDS cease and all tenants informed.
No one has questioned how the the TDS and NALS know when an agent loses cover yet these bodies know because there is a mechanism in place.
So, if tenants know when their deposit in no longer registered due to their agent getting kicked out ARLA, bodies with an interest will know too.
Now, as NALS are SAFEagents administrators it seems that they have this covered which, I understand, was a key reason the SAFE group asked NALS to administer it. Quite clever really.
I understand that this 'cascade' system is not shouted about as the organisations concerned don't want to admit to co-operation!
Does that help? If not - why not ask SAFE?
There are plenty of schemes which claim to offer client money protection, insurance and bonding but until it's compulsory to be part of one in order to trade they are all pretty pointless to landlords who rarely know the right questions to ask. Add to this the Agent who's signed up to them all when the landlord does his due diligence but fails to renew three months before he closes the doors and does a runner with landlords rents and unregistered deposits and there's another problem. why oh why is spending client monies not a criminal offence but a civil offence? Then there's the problem of the variations of the different money protection schemes, and they really are all very different and range from having to have a seperate client account through to £100,000 of insured client money protection per business to £25,000 of protection for each property. I also agree with Teen's comments @Property118
@Lettings Guru on 2012-03-14 14:24:53
".......SAFE is like ABTA - its simply a signpost to ensure a clients money is protected.....".
I have always supported the idea of SAFE and educating the public. However you use the word "ensure"
and as before I ask HOW is it continuously ensured?
What is the method of checking with the actual Safeagents provider year on year?
@ a safeagent
"the people that run it are Allagents"
Are you serious???
When the hell did they get involved in it ??
I spoke to Chris Hamer at the ARLA conference and he really impressed me. I felt that his views were those of an ultimate professional and impartial in that he has no bias towards complainant or agent that normally is associated with any consumer type watchdog.
SAFE agent stand seemed very popular and people were queuing to give interviews supporting them. So much for the 'ARLA doesn't support SAFEagent' myth. One or two suits on the board may not be in favour, but most of the agents certainly were. Even our President seemed pretty chummy with them.
Those on here who think SAFE will replace TPOS are very misinformed and fail to understand what it is SAFE is trying to achieve. This is perhaps a reflection of SAFE not getting the message out - but perhaps their consumer launch will change that - only time will tell - but they seem to have done more in 6 months than ARLA has in 4 decades!
We are SAFEagents and were at the NALS conference where SAFE had a stand. I spoke to Eric Walker and really liked the ethos behind SAFE. It is not nor does it intend to be a regulator and its clear that SAFE supports TPOS as the redress scheme.
SAFE is like ABTA - its simply a signpost to ensure a clients money is protected and a simple way of educating the consumer. NALS involvement was by invitation as they have the resources to administer and are not part of a trade association.
Nevertheless, its clear that the agents behind SAFE call the shots and NALS administer and advise - thats why I like it. Its run by people who can actually remember what's its like to speak with a customer.
I also have to say that I saw PBK and Mr Hamer talking the SAFE people - and it all seemed very friendly. Certainly seems like they have all taken note and supported it tacitly.
@steve Lander SAFEagent is NOT NALS. Yes its administered by them - but only database and record keeping - but that's all. The people who run it are ALL agents and none of them are part of the NALS executive.
As with any call for regulation of an industry there are always conflicting bodies seeking to make moeny from that regulation. Landlords in UK PRS have just been landed with bills for compulsory licensing of HMO's and compulsory EPCs from April. On top of this Gas checks, the need for electrical certificates (not yet compulsory but good practice to cover themselves).
What I'd like to see if a requirement for regulation that actually also outlines how it will channel revenue gained into actually enforcing those regulations so that it's not just about a money-go-round that cripples honest businesses an allows the sharks to keep swimming.
Competition and in-fighting between the organisations supposedly representing an industry does nothing to inspire confidence.
We see a lot of debate about this on our site. Landlords are sick of paying for regulations whislt being scapegoated because the rogues continue to bring the profession down.
property118.com
I am not sure the Radio 4 audience got a true picture about the role or status of the Property Ombudsman at lunch time today. (12:30) ish for those that want to listen again
http://www.bbc.co.uk/iplayer/console/b01d2fbs scroll (forward 30 minutes)
This "for profit" company ought to make it very clear that TPO is a company that profits from deliberately stirring things up, surely a regulator should not be profit motivated.
In my town, every sales agent is now a lettings agent.
In 2007 there were 3 agents doing lettings properly - now there are closer to 13...
You cannot become a "good" lettings agent who has the depth of experience to deal with the trickier side of lettings in such a short time, especially when you are trying to prop up a loss making sales operation.
Hiring someone who can put ARLA after their name or joining TPO, NALS or SAFEagent doesn't suddenly make you good.
But you pays your fees and cross your fingers.
Then everyone is competing and slashing fees because some business is better than no business.
Then, all of a sudden, the landlords are rubbing their hands saying "Woo Hoo, we saved money" and then losing money or unprotected because of the ineptitude of the agent.
Or the tenant who says "Woo Hoo, no referencing fees, we saved money" and then getting really bad service which leaves them out of pocket or unprotected.
I did a valuation the other day and lost it to another agent for 4% let only on the first 6 months only with no second term fees.
My average let only fee before 2009 was at least double that for the initial length of the tenancy agreement and we usually signed for at least a year.
I believe the wolves are eating the canines out there.
@Rebel.
Parasite. That's the word I was looking for. Thank you.
Resign immediately and let him whistle for his £200. Unless it's gone up since I told him where to shove it.
Thank you Steve. I reciprocate your apology with one for my reply.
I think SAFEAgent is brilliant and it should do away with the need for TPO and their profiteering regulation.
Being blunt about NALS, great idea but it has failed from day one simply because the egos of Arbon House were going to have nothing to do with anything set up by HDH.
SAFEagent powered by Nals should be good but someone has got to do far more work on the framework for regulation of client money. As it stands right now everyone is shouting about Client money protection but very, very few people understand just how deep and far reaching regulation needs to go.
I was at a meeting last week where it was estimated that despite TDS, £millions possibly £billions of client money is not necessarily where it ought to be. This money is not just misplaced by people like Weston and Hussain; RICS, ARLA, NALS and The Law Society all have members that have Client accounts that are effectively out of control or are running suspense accounts within their client account simply to make them balance for the auditors.
The Ombudsman is not wrong to call for co-operation between the Professional bodies but regulation needs to encompass the 100,000 or so landlords of NLA and the XXX? Landlords not controlled by anyone.
@ Don't make me laugh
Apologies for the 'idiot' comment. It was meant to be more 'tongue in cheek' than scathing.
Sorry to Louise as well!
Interesting though isn’t it that SAFEagent is really NALS dressed up in different clothing.
@ Steve Lander That isn't quite the impression the SAFEagent site gives, NALS have been approached for help is the exact wording. I think only some one more stupid than me, an idiot, would claim that Nals is SAFEAgent or vice versa. Louise does my admin, that doesn't make me Louise!
A minor point, try looking on the NALS site for their code of practice or industry standard! What is it now 10 years since HDH left to set up NALS and there is not a single sentance available to the public to read about the national approved letting scheme.
So here we have it folks SafeAgent is apparently NALS by another name.
The only regulation for a SAFEAgent is that the client account is separate from the Office account, no requirement to be NFoPP, NALS or Law Society.
And by the way "Fully Endorsed"? who by?
I have supported Safeagent since the beginning - as a marketing system for consumer protection.
However, just exactly what does SAFEagent actually DO to ensure that the firm displaying their "logo" is continuously covered by one of the money protection schemes? Have expressed this a few times - but still await a proper answer.
Thats interesting. I read a story last week about allagents wanting to work with regulatory bodies to do a similar thing.
Now we hear the TPO promoting it..... It appears to me that these talks are a lot further down the line than we thought!
@Don't make me laugh
SAFEagent is NALS, you idiot!
SAFEagent is administered by Approved Letting Scheme Ltd t/a National Approved Letting Scheme (NALS). Company No 3664069 Registered Office: 2 Lake End Court, Taplow Road, Taplow, Maidenhead Berkshire SL6 0JQ
No surprise the complaints have risen. Too many trying to get on a bandwagon they need to cover costs and have little knowledge as to how rentals work.
Deposit complaints have risen because tenants are just not used to being tenants today and hence they get the oik when told they have to pay for damages. More fool you agents for not making it clear before, during and after the agreement period.
Of course complaints have risen probably about in line with the %age rise in rentals plus a bit to cover those with no ideas and a drop in sales complaints because, guess what? You got it, sales have dropped a corresponding amount.
This to me is a no brainer.
Mr Hamer? The Property Ombudsman Scheme? Where have I heard about them before?
Oh that's right, The Property Showroom in Leeds! They were registered with TPO. How exactly did the TPO code of practice stop that firm getting into difficulty? it didn't, did it!
Rebel is right on the money, this isn't about consumer protection, TPO can see that SAFEagent will offer a far better service and eventually become the redress scheme for sales as well as letting and then TPO really will be in trouble.
What is NALS if it is not a national approved letting scheme? (that doesn't work either)
"seek to ensure that consumers understand why they should avoid letting agents who refuse to follow a set of industry standards, such as the TPO Code of Practice"
what is the TPO code of practice for lettings?
what industry standards are there?
Sorry all, the king is in the alltogether and these fine new clothes mr hamer is banging on about do not exist!
there is need for an industry standard and agents should be regulated but that regulation should not come from a profit motivated company like TPO. replies to a story on LAT last week showed that regulation will provide a huge opportuniy for profit generated by CMP insurance commission. that doesn't seem right to me.
'The council would also “seek to ensure that consumers understand why they should avoid letting agents who refuse to follow a set of industry standards, such as the TPO Code of Practice, and who do not seek out membership of recognised industry bodies such as ARLA, NALS or RICS”.'
Er, Chris baby, I presume you mean we don't want to support self-serving, poor value, bureaucratic, empire building, ineffective parasites?