Briefing for Landlords, Agents and Managers on Tenants Rights of Redress against Agents and Property Managers
Almost every person or organisation involved in ‘property management work’ or lettings agency work must belong to an authorised redress scheme.
Complaints against scheme members can be investigated, and decided on, by someone independent, without having to go to court. This came into effect on 1 October 2014.
Information for tenants on their rights can be found here.
Q: Who has to join a scheme?
A: You should join if your business involves acting on instructions:
- from landlords or tenants wishing to rent residential properties in the private rented sector; or
- regarding repairs, maintenance, improvements, insurance or other services to residential properties in the private rented sector.
Even if landlords do not have a formal agency business, but you are paid for helping out a member of the family, or a friend, with their properties then they should join a scheme. If a landlord has an arrangement with another landlord to cover for each other whilst on holiday they should also join a scheme.
Q: Are there any landlords who do not have to join?
A: Landlords do not have to join if:
- they do not work on anyone else’s properties
- if they are a local authority, a University, a charity housing students or a social landlord.
- if all they do is publish adverts or provide information about properties to rent or if you just provide a means for landlords and tenants to communicate direct with each other.
Q: So what happens if we don't join?
A: If landlords should have joined a scheme, but have not, the Local Authority can take action and can impose a penalty of up to £5,000. The Local Authority impose and collect these penalties, and in Leeds 183 investigations have taken place and £47,500 of invoices have been issued, as of January 2016. A dissatisfied tenant can also still sue for compensation if they cannot claim through a redress scheme.
Q: What Schemes are there?
A: There are three schemes that are recognised and landlords must use one of these authorised schemes. These are:
Q: Which Scheme Should a Landlord Join – and What is Necessary?
A: Look at the individual schemes to see whether you are eligible and how much it costs to join. When landlords join a scheme they will need to comply with the scheme’s rules. These are based on existing law, accepted good practice, and principles of fair dealing. Some landlords may need to change the way you do some things to make sure they are compliant. A tenant could complain to the scheme if landlords do not comply with the rules.
Q: What if a Tenant Complains?
A: The scheme will carry out an independent investigation. The exact procedure will depend on the scheme rules.
If a complaint is upheld, the scheme can impose sanctions according to the seriousness of the complaint. The scheme might just ask for an apology for something minor – but for something serious landlords can be fined and/or ordered to pay compensation of up to a maximum of £25,000. Landlords can also be expelled you from the scheme. If no other scheme accepts you, you cannot carry on in business that involves lettings agency work or property management work.
Note
In this note the term landlord has been used to cover all categories of activity which includes letting agents and managing agents.
The applicable legislation can be found in:
The Enterprise and Regulations Reform Act 2013 sections 83 to 88 http://www.legislation.gov.uk/ukpga/2013/24/part/6/crossheading/redress-schemes-lettings-and-property-management-agents/enacted
and
Further information for Leeds landlords can be found at:
http://www.leeds.gov.uk/Business/Pages/lettings-and-property-redress-scheme.aspx