The Association of Residential Letting Agents (ARLA) has informed the Government of its belief that it should be a legal requirement for all letting agents to belong to a Client Money Protection scheme.
It also thinks that all letting agents should be professionally qualified and required to undergo continuous professional development.
Furthermore, ARLA says that rogue agents should be banned from the industry, including forbidding prohibited sales agents from working in lettings.
Urging for a scheme similar to the London Rental Standard, ARLA says that regulation would ensure fairness and “the removal of those agents who bring the industry into disrepute.”
ARLA has responded to the Department for Communities and Local Government (DCLG) consultation – which closed today – on its discussion paper titled, Tackling rogue landlords and improving the private rental sector.
Rogue Letting Agents Should be Banned, Says ARLA
The document is the first time the Government has proposed a measure for banning rogue letting agents. Currently, only sales agents can be prohibited from practice, under the Estate Agents Act 1979.
ARLA backs the plans, but provides further proposals.
It criticises the low number of prosecutions for housing offences and says that the fines should pay for further enforcement.
Additionally, it calls for the Sentencing Guidelines Council to set judicial guidelines, with unlimited fines.
ARLA believes that rogue individual agents, rather than companies, should be banned from trading, noting that if a firm is prohibited, there is nothing to stop its directors starting another business.
The organisation also says that rather than creating a blacklist of rogue landlords and agents, which the DCLG has proposed, it would be better to extend the Estate Agents Act 1979 to include letting agents, and possibly landlords.
ARLA’s response states: “Many letting agents are also sales agents and therefore regulated under the Estate Agents Act 1979. This presents us with an opportunity to remove the current situation where an estate agent can be banned from selling properties but is still legally allowed to undertake lettings activities.
“Should a blacklist and banning orders come into being, we would strongly urge the Government to ensure sufficient dialogue between the body responsible for administering the blacklist and any register of banning orders and Powys County Council in order to ensure both bodies are aware of new entrants onto either list and ensure that any individuals banned from one activity are also banned from the other.”
ARLA would also like to see any blacklist created made publicly available.
The discussion paper proposes a regime of civil penalties imposed on landlords and agents.
ARLA reacts: “Fines currently issued by courts are very low and provide only a limited deterrent to criminal landlords.
“By way of an example, there has been a recent case where a property had no smoke alarms, no hot water and a cockroach infestation. The landlord only received a £350 fine, £324 in costs and a £35 victim surcharge. The landlord had failed to fully comply with the notice to improve the property and pled guilty by post. The landlord was receiving £750 a month in rent and the maximum penalty available to the court was fines totalling £20,000.
“In many cases, criminal landlords are now accepting these low fines as another operating cost to their business. Fines of less than one month’s rent are not a sufficient deterrent.”1
ARLA is calling for £5,000 fines to be standard.
The consultation can be viewed here: https://www.gov.uk/government/consultations/tackling-rogue-landlords-and-improving-the-private-rental-sector