National Trading Standards Redress scheme warning for agents

Estate and Letting Agents in the UK are being urged to check that they are signed up with an approved redress scheme that covers the full remit of their work. The warning follows a recent tribunal that penalised a business that was signed up to a redress scheme for its letting agency work but not for its property management work.

In one of the first decisions of its kind, the Upper Tribunal* upheld a fine of £3000 against the business for its failure to belong to an approved redress scheme for property management. Its membership of the Property Ombudsman Scheme covered it for residential sales and lettings, commercial sales and lettings and some property management, but not for residential leasehold management.

The decision has prompted National Trading Standards to issue guidance to Estate and Letting Agents across the country, focusing on agents ensuring their redress scheme covers all areas of their work, whether it’s sales, lettings or property management work.

James Munro, Head of National Trading Standards Estate and Letting Agency Team, said:

“We’re urging all estate and letting agents to double-check their redress scheme to ensure it covers the full breadth of their work. If you’re already signed up to a redress scheme, you may think your business is covered, but you should check that this covers the full breadth of your company’s activities. The recent tribunal decision shows businesses that are signed up to redress schemes for one area of their work but not for others may face hefty penalties in the courts.”

Failure to be a member of a redress scheme, when legally required to do so, could result in a penalty notice being issued against the business. The two approved redress schemes are:

• Property Redress Scheme www.theprs.co.uk
• The Property Ombudsman www.tpos.co.uk

Sean Hooker, Head of Redress at the Property Redress Scheme, said:

“Whilst PRS membership covers most agents for all the work they do, they must tell us from the outset the areas they undertake work in so we can record this under their membership. Agents must also ensure that all their branches and offices are registered separately and the appropriate fee paid. If you are in any doubt whether you are fully compliant please contact us immediately”

Katrine Sporle, Property Ombudsman, said:

“TPO’s online membership and website provides detailed information about the categories of work TPO provides redress for, the options available, and clarity around the need to be registered for each category. Our membership team is on hand to give support and advice for new and existing members alike, so do please contact us if there is anything you are unsure about or need guidance on.”

GUIDANCE FOR ESTATE AND LETTING AGENTS

• Make sure that your business is signed up with an approved redress scheme for the correct line of work (Sales, Lettings or Property Management Work).
• Review your existing terms of agreement/membership to ensure your redress scheme covers the full activities of the business.
• Check the terms of agreement/membership to confirm if your business is required to pay membership for individual branches.

As of 1^st April 2019, Letting and Property Management Agents in the private rented sector are required to belong to a Client Money Protection (CMP) scheme if holding client money. If you’re an Agent who is required to belong to a CMP scheme, you should be displaying a certificate of your membership at your premises and online. CMP schemes should all be providing certificates. If you’re having difficulty in obtaining a certificate, please contact CMPschemes@communities.gov.uk

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