In a survey by the Association of Residential Lettings Agents (ARLA), 95% of consumers revealed that they believe letting agents should be licensed and it is a shock for many to learn that there is currently no scheme in place at all. Hundreds of thousands of pounds of consumers’ money is lost each year to unprotected, unprofessional and unethical letting agents, according to ARLA.
A growing number of tenants and landlords are losing out to cowboy agents in the following ways:
• Loss of funds through a lack of client money protection
• No professional indemnity insurance in place to protect a consumer from a serious error;
• Loss of monies due to the unlicensed agency holding the funds going into administration;
• Poor advice to landlords, for example about their legally-required deposit protection responsibilities, which can result in loss of the deposit for tenants and/or a fine for landlords;
• No commitment to best practice or any form of independent redress scheme for when things go wrong.
Ruth Lilley, head of membership and professional development of ARLA, said: “ARLA has lobbied the Government for 10 years to assist us in establishing higher industry standards. For too long the rental sector has been seen as the black sheep of the property market with a lack of regulation of and a requirement for redress to protect the consumer when the agent’s failings are to the financial detriment of that consumer.
“The ARLA Licensing Scheme will create the gold standard for letting agents in the UK, offering consumers best practice service and advice – as well as a commitment to the protection of their money.”
All ARLA members will now need to be licensed as part of their membership, which includes the following implications:
• Each individual member will hold a gold standard professional qualification relating to lettings;
• All members must undertake Continuing Professional Development
• Agents must ensure they have client money protection schemes in place to protect all tenant and landlord funds held by their office;
• All clients’ funds require to have an annual independent audit
• Agents must have professional indemnity insurance in place;
• Agents must sign up to an independent redress scheme;
• Agents must abide by a strict code of practice.
None of the above is compulsory for letting agents as standard at the moment.
ARLA’s sister organisation, the National Association of Estate Agents (NAEA) will follow suit with the launch of its own licensing scheme later this year.
