Industry Regulation is Coming
New letting and property management regulations to be introduced
On April 1st 2018 the UK government announced a range of new proposals in regard to letting and property management regulation, which will provide a greater degree of protection to the private rented and leasehold sector – and while the announcement may have been made on April Fool’s Day, the issues the proposals are aiming to solve are certainly no joke.
As experts providing award winning property/block management services and also Build to Rent services we work with many leading estate and letting agents in Manchester and the North West – but as with any industry, there are plenty of less reputable service providers around.
In fact, according to the government’s statement, every day sees thousands of renters and leaseholders being let down by their providers, so these new regulations will be a welcome change for around 9 million leaseholders and private renters in the UK.
What will the new regulations entail?
Some of the key problems facing leaseholders and renters include a lack of transparency when it comes to costs, unexpected expenses that may not have been clearly outlined and slow or inadequate repairs. Overly inflated fees and high-handed management practices are also a common issue.
In order to address these problems, lettings and management agents will soon be subject to a mandatory code of practice, falling under the jurisdiction of an independent regulator. Any agents subsequently found to be in non-compliance of the standards laid out by the code will no longer be allowed to operate – and in the case of severe breaches, they may also face criminal prosecution.
With no current obligation to hold a relevant qualification to trade in the sector, this is also set to change with the new regulations, as all letting and managing agents will be required to hold a nationally recognised qualification once they come into force. Additionally, a higher qualification will also need to be held by at least one individual in the organisation, and agents will be expected to undertake continual professional development and training.
For leaseholders, new and more efficient ways of challenging unfair services charges and fees will also be introduced, along with greater support being made available should they wish to change to a different managing agent in order to access a better service.
Creating the code of conduct
While the changes have only just been announced the government isn’t hanging around, with plans to draw up the final proposals early in 2019. The creation of the code of conduct will be a combined effort of a working group of letting, management and estate agent representatives, tenants and regulation experts – and as far as we’re concerned, it can’t come a moment too soon. Regulation has been severely lacking to date, so this will be a welcome change and hopefully help to improve the image of the sector too.
In addition to the matters outlined above, the working group will also be tasked with assessing whether or not there should be a cap or ban on unfair additional charges being issued to freehold and leaseholders, including administration fees, leasehold restrictions and the use of restrictive covenants.
Amongst other stakeholders, the government have and will look to the Institute of Residential Property Management (IRPM) for input, as the current leading professional qualification providers for the sector. Realty Management’s own director, Chris Wiles, sits on the board of directors at IRPM and is a long-term advocate of raising industry standards. He is very much looking forward to seeing these new letting and property management regulations come into force and comments: “All to often we see agents and individuals providing sub-standard services with some quite frankly not having a clue as to the legislation surrounding the sector, let alone best practices or any customer focus. The sooner those in this category have to step up to sensible standards or are forced to stop their malpractice, the better it is for everyone.”