We always keep an eye on the competition within the Lettings industry and it was no surprise to see new Letting Agents popping up all the time; We all have to start somewhere!
Currently, anyone can set up a new Letting Agency without any experience and this leaves the door wide open for rogue Letting Agents. This sector has seen Agents who disappear with clients money, abusing both tenants and landlords and basically showing complete disregard for any legal obligations when it comes to letting standards.
We, as agents are constantly updated with new letting standards and have a duty of care to our Landlords to ensure their property is being properly managed through the correct channels. One example is being a member of a Client Money Protection scheme.
Letting agent regulation is currently voluntary in Scotland through Association of Residential Letting Agents (ARLA) however, there are other bodies that agents can join which are not as strict when it comes to certain requirements.
Finally, the government put in place a proposal for all agents in Scotland to be registered following the release of The Housing (Scotland) Act 2014 which comprises a statutory code of practice which all letting agents must adhere to. These are strict training requirements that all agents must meet if they want to register and remain on the Letting Agent registration list. Although there has been some uncertainty on when this regulation comes into place, the date has now been set to a force date of January 2018. The full list of regulations to be included can be found here.
Here are some of the main points you can expect to come out of the new regulation:
Handling Client Money
The most important one from my point of view is handling client monies. As mentioned above, we have all read the horror stories and watched the T.V programmes on landlords/agents running away with client money. This is to ensure that all agents are registered under a Client Money Protection Scheme (CMP) and have a strict financial process in place. We have already seen one of the changes in 2012 when the Tenancy Deposit Scheme (TDS) came into place to stop landlords or rogue agents holding tenant deposits and spending as they please which has had a great effect on the letting industry. This will also prevent businesses from dipping into the client account to pay off other debt and improve cashflow. This comes with hope that CMP legislation will do the same with rent/floats and any other monies passing through the letting agent. It will be compulsory for all agents to hold a separate client money account which in turn will protect and separate all client money from business accounts. These will be audited regularly to check that standards are being met. This legislation will also cover insurances, debt recovery and criminal activity such as money laundering. Something that not a lot of agents know how to handle should the situation arise!
All Staff will be expected to qualify and maintain training expectations when it comes to all aspects of letting such as tenancy agreements, repair works, maintenance, communications, equality and of course all legal obligations considered with lettings. All senior staff must be fully trained and qualified to the highest level of Letting and Property Management.
Technically, a lot of things associated with Lettings can be verbally agreed. This regulation ensures that written agreements must be in place between agents, landlords and tenants other than the standard lease agreement. Some examples of this are;
- Maintenance/repairs correspondence (e.g. Notification of works)
- Ending a tenancy through the correct channels
- Recovering unpaid rent
We always ensure we have everything in writing to keep us right but we know that some landlords and agents out there definitely cut corners and do not go through the appropriate channels.
We have heard from a lot of tenants who don’t know where to turn if they have a complaint about their letting agent. Under the new regulation, Agents must be transparent with their complaints procedure and advise of the correct channels to complain about a landlord or agent. These should also be backed up with a complaints log which is audited regularly.
Once the regulation is in place, all Letting agents will be displayed on a register which will be made public. If a landlord or tenant thinks their agent is not compliant with the new Letting Agent code of practice they must notify the letting agent in the first instance in writing to allow the agent to rectify the situation. If the landlord or tenant remains dissatisfied after raising their complaint with the agent, they can apply to the First-tier Tribunal (the “Tribunal”) to allow them to investigate further.
Bellevue Lettings are already marked as a Safe Agent which means our landlords and tenants can rest assured that their money is safe and secure. This is a recognised Client Money Protection Scheme which already meets the new standards coming into place in January 2018. In addition, we are also fully accredited by The Royal Institute of Chartered Surveyors (RICS) which requires us to follow a strict code of conduct when it comes to CMP and complaints procedures. We are one of very few letting agents in Edinburgh who hold this accreditation. Although we are also members of the Scottish Association of Landlords/ Council of Letting Agents, we are also in the process of undertaking our NFOPP qualifications at the highest level. This will ensure we are trained and fully qualified which will then allow us to register for ARLA (Association of Residential Letting Agents) accreditation prior to the new regulations coming into place in January 2018.
As you know, Bellevue Lettings are still new to the Lettings market having only been in business since July 2016, we want to make sure we are delivering the highest of standards and of course giving the right advice to both landlords and tenants so we welcome this new regulation with open arms. Having worked within Lettings for some time and noticing what works and what doesn’t not to mention noticing some new Letting agents pop up who have had little or no experience with Lettings, we do hope that this regulation starts to filter through the best of the agents and see some of the rogue letting agents closing down. Some of the Private Rented sector has been tarnished and slammed as a result of bad practice and the agents who work hard and stick by the rules are suffering which of course is not fair.
With more and more investors stepping onto the property market, Edinburgh in particularly has seen a great rise in the private rented sector and this has come at a great time as we see renting becoming the favoured option for housing.
Roll on the new Regulation!