Does your letting agent belong to a redress scheme?
Is your letting agent is part of a redress scheme, ensuring accountability and consumer protection in the rental market
Since 1 October 2014 it has been a legal requirement for all letting agents and property managers in England and Wales to join a government-approved redress scheme.
Our own Property Redress Scheme allows agents to comply with their legal requirement to be a member of a government authorised consumer redress scheme and to settle or resolve complaints made by consumers against our members. The only other currently approved scheme is The Property Ombudsman.
Agents who are found to be operating without membership of a redress scheme can be fined up to £5,000 and have their licence revoked.
Landlords should also be aware that as part of the upcoming rental reforms the Government intends to introduce a new Ombudsman to settle disputes between landlords and tenants, with the aim of reducing the number that end up in court.
They also plan to have a new information portal to help landlords understand their legal responsibilities, which will also serve as a database of private landlords and their properties, with registration mandatory.
In advance of this becoming law, you can choose to join the Property Redress Scheme, which offers a transparent resolution service to all property professionals.
Membership can enhance your reputation and give your tenants and any other customers confidence in their dealings with you. For more information, visit the PRS website.
In Scotland, letting agents must sign up to a register and abide by a statutory Code of Practice, which gives landlords and tenants means of redress for breaches of the Code via the First-tier Tribunal.
In Northern Ireland, while The Property Ombudsman (TPOS) deals with complaints, letting agents aren’t currently required by law to belong to the scheme.
Since April 2021, it has been mandatory for all letting agents and property managers in England who handle landlord and tenant funds to belong to a client money protection scheme such as Client Money Protect, part of the HFIS group.
Client money protection is an additional layer of protection that gives landlords and tenants a route to reimbursement if their agent goes out of business or misappropriates funds, so it’s vital you make sure any agent you use is a member of an approved scheme.
Find out more with our free guide to client money protection.
In Scotland, the CMP rules are slightly different. In Wales, landlords are required to join a client money protection scheme before they apply for an agent licence.
In Northern Ireland, agents don’t currently need to join a CMP scheme.
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2022 marked a major overhaul of lettings legislation in Wales, with changes under the Renting Homes (Wales) Act in force from 1 December 2022.
Five of the key changes:
The AST has been replaced by an ‘occupation contract’ and ‘tenants’ have become ‘contract-holders’. It is also a legal requirement to have a written agreement, much of which consists of prescribed clauses
Landlords now have to give contract holders six months’ notice and can’t give notice within the first six months of the contract – effectively meaning an initial minimum 12-month commitment for landlords. Meanwhile, the contract holder can give four weeks’ notice after any fixed term has expired
Section 21 has been replaced with a ‘Landlord’s Notice’ and Section 8 has been replaced with a possession notice, with different forms to be used, depending on the ground(s) for eviction
Tenants are protected against ‘retaliatory evictions’, under provisions similar to those in England
New ‘fitness for habitation’ rules include mandatory five-yearly electrical tests, bringing Wales into line with England and Scotland, and ensuring working smoke alarms and carbon monoxide detectors are fitted
Further information about the changes – along with published guidance for both landlords and tenants – is available on the Welsh Government website.
Since 23 November 2015, it has been a legal requirement in Wales for all landlords to register themselves and their properties with Rent Smart Wales and for anyone letting and managing properties to be licensed.
In order to obtain a letting licence, self-managing landlords and agents have to complete a training course and pass a ‘fit and proper person’ assessment.
The following new laws governing private tenancies will be in force from 1 April 2023, under the Private Tenancies Act (Northern Ireland) 2022:
Landlords must provide all tenants with:
A notice containing tenancy information
A notice of variation when any changes are made to their tenancies
Receipts for any cash payment in relation to a tenancy
Regarding tenancy deposits
They can be no more than one month’s rent
There will be increased time periods for protecting and providing information on tenancy deposits
The previous six-month time barrier to prosecution of tenancy deposit offence has been removed, so failure to protect a deposit will become a continuing offence
The Northern Ireland Department for Communities has produced a guide for landlords and tenants covering these changes in more detail.
The Act also contains a number of other changes and the Department is continuing to work on Regulations and Commencement Orders for these.
