ISSUE No.106 Autumn 2013
COMPULSORY REDRESS SCHEME FOR LEASEHOLDERS “WITHIN A YEAR”
Recent attempts to regulate managing agents – an FPRA aim – failed in the House of Lords, but a new Government-led consultation exercise is taking place on the provision of a redress scheme in residential leasehold.
FPRA Hon Consultant SHULA RICH has been representing the Federation at these talks and here writes a report for us on progress so far:
In April the Government tabled an amendment to the Enterprise and Regulatory Reform Bill to “require letting and managing agents in the private rented sector and managing agents in the residential leasehold sector to offer landlords and tenants access to an approved redress scheme”.
The details have not been decided yet, and several round table conferences have been held at the Department for Communities and Local Government (DCLG) to help develop the procedures.
The aim of the policy is to make it compulsory for all letting and managing agents to be members of a Government approved redress scheme, which “will provide a light touch route.. for freeholders and leaseholders to pursue a complaint against their agent”.
It will not cover those FPRA members who directly manage their own properties, nor landlords managing their own properties.
This scheme is in addition to courts and tribunals. It may cover issues around best practice which are not part of the RICS (Royal Institution of Chartered Surveyors) code, and are not covered elsewhere.
FPRA participated in the discussions and the impression we came away with was that Ruth Hayes, leading for DCLG, is keen to make the proposals fit the issues that stakeholders have with managing agents, and develop useful, workable schemes.
The Government has to work within set guidelines, making sure: not to “bless” any particular code of practice or organisation; that the schemes are financed by stakeholders; and that there is a choice of scheme from light touch to more formal.
It will be mandatory to belong to a scheme, but INSIDE THIS ISSUE
Rights & Duties of Leaseholders 4 Ask the FPRA Legal Jottings New Faces
which one will be left to the agents. Schemes will be national as many agents cover the country and therefore local schemes would be costly for large agencies.
For a scheme to be approved, DCLG has said that it would need to be satisfied that the scheme had “appropriate duties and powers”. Sanctions against agents who do not join will be on a sliding scale. The ultimate sanction will be that an agent can no longer trade.
If an agent continued to trade, it would be a criminal offence. The prosecutor could be Trading Standards, or Private Sector Housing in local authorities.
Suggestions to DCLG on behalf of FPRA included:
(1) That the procedure might be similar to that recently undertaken by DCLG for the approval of Tenancy Deposit Schemes, where several bodies bid for the right to administer the schemes. Four schemes out of the five offered were approved and landlords given the choice of which to join
(2) That an Ombudsman scheme would be the most acceptable, due to the good reputation of ombudsmen generally and peoples’ familiarity with the system
(3) That full transcripts of decisions should be publicly available and that this in itself would act as a teaching document and help to raise standards – giving examples of the first cases of the new Home Owners Housing Panel in Scotland which are very detailed, as are many leasehold disputes
(4) FPRA asked if schemes could make their decisions public in addition to providing a summary as part of the annual report etc
It is envisaged that the legislation will be Continued on page two
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