October sees another change in the private rental sector (PRS) when all lettings agents are required to become members of a redress scheme.
It means that consumers – landlords or tenants – who have a dispute with their lettings agents that they can’t resolve can turn to one of the three approved redress schemes, such as The Property Ombudsman to which my agencies belong – to get restitution for financial loss.
That’s all very well and good if the agent pays up but it’s rather like shutting the stable door after the horse has bolted. How do you recover money you have lost from an agent who has gone out of business or maybe just disappeared with the cash or used rental and deposit income to cover day-to-day business costs instead of passing it on?
The only means of real financial safety is to use an agent who is a member of a professional body where Client Money Protection (CMP) cover is mandatory for membership.
My agencies, Town and Country Southern and Fine and Country Southern Hampshire, have CMP because I am a Fellow of the Association of Residential Letting Agents (ARLA). All member agents have to have CMP and are monitored to ensure they comply.
So instead of, as a landlord, finding the agent who charges the lowest fees for managing your property maybe you should concentrate on finding one who operates to high standards and has CMP.
I am not alone, of course, in having ARLA membership and other agencies are available. To find one, go to http://www.arla.co.uk/find-agent.aspx and search the database.
At the end of the day, if the agent should run into financial trouble, it’s better to have the reassurance that you will get your money back rather than being able to relax and admit that while he shafted you over your money at least he was cheap! Something about a false economy comes to mind.
Of course what we all want, and that includes all responsible lettings agents, is for proper regulation of the industry. But successive governments have viewed regulating agents as restraint of trade / increasing overheads / restricting consumer choice. Sometimes they quote all three reasons, sometimes only one or two.
But surely consumers won’t mind having their choice restricted to only reliable, professional agents and the exclusion of rogues from an industry where anyone reading this column could open a lettings agency this afternoon without any formal checks on their suitability or any training.
We need proper, joined-up thinking about lettings agency regulation. But until, if ever, it arrives play it safe and search out an agent who has cast iron protection for your money.