There were nearly double the number of complaints about letting agents compared with those about sales agents, the outgoing Property Ombudsman has revealed.
Christopher Hamer, who steps down from his role after nine years, has called for a Property Agents Act.
This would repeal the Estate Agents Act and bring letting agents into its remit.
It would also reflect changes in the market, including online-only agents, portals and ‘passive’ intermediaries.
Hamer said: “If the situation is allowed to drift then there will always be those firms (albeit in a minority) that will seek to take advantage of loopholes to the disadvantage of not only those consumers unlucky enough to deal with them, but of the industry as a whole.”
In the first six months of this year, 9,141 people contacted TPO with a complaint – up 8% on the same period last year.
More than half (58%) of all the inquiries received were to do with lettings.
Of the 5,303 complaints logged, 58% were to do with lettings and 30% with sales.
Of the 1,587 complaints that went to review, 934 were against letting agents (up 30%) and 596 were against sales agents (up 39%).
Hamer said of his call for new legislation: “A Property Agents Act would update the Estate Agents Act 1979 to reflect developments in the sales market, and most relevantly now, bring lettings into a precise framework where all agent activity is covered by one piece of legislation.”
He says licensing of agents, standardised tenancy agreements and compulsory client money protection could all be included in such an Act.
Hamer’s final report as ombudsman, covering the first half of this year, draws attention to the growth of both the industry and TPO.
As at June 30 it had 34,944 members, up 16% on the 30,128 at the same date in 2014.
All types of membership were up, apart from international members.
Sales agency offices stood at 14,452, including online-only agents; lettings offices stood at 13,419, including 253 online-only agents; commercial sales and lettings members were also up; and the number of buying agents had gone up from 433 to 619.
The number of property buying companies had risen from 37 to 99, and auction members from 254 to 275.
The incoming ombudsman, Katrine Sporle, who takes up her role on November 1, has already commented about the backlog of complaints.
TPO’s interim report – complete with some interesting case studies – is here
What did the other 637 people complain about?
If membership of TPO increased by 16% but complaint increased by 8 % doesn’t that mean the number of complaints per firm actually fell?
934 lettings complaints against 4.1million tenancies is 0.023%, that isn’t very many complaints. Tto call for any legislation based on a report where the numbers are as hollow as this is in my opinion a bit daft.
HMRC have no idea how many landlords are due to pay income tax on the rent they receive, as a consequence only Landlords daft enough to be honest pay tax. Before government start contemplating legislation to control complaint levels that are a fraction of a rounding error percentage it might be best to police the laws that exist.
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“HMRC have no idea how many landlords are due to pay income tax on the rent they receive, as a consequence only Landlords daft enough to be honest pay tax. Before government start contemplating legislation to control complaint levels that are a fraction of a rounding error percentage it might be best to police the laws that exist.”
You are either not a letting agent or have not come under the HMRC radar; YET.
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No, quite right! I am a consultant who has discussed the problems of policing Section 19 and SA105 directly with advisors to HMRC. I am the architect of the system that now reportedly accounts for 68% off all PRS rents in the UK (about £27 billion)
When I say “HMRC have no idea how many landlords are due to pay tax on rent received” I am quoting an advisor.
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Busy bee.
HMRC seem to have moved away from Section 19 as they are now issuing notice under Schedule 23 of the Finance Act 2011 being more encompassing.
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This dates back to 2011/2012 and had been on going since 2003/4 HMRC at the time were struggling to process Section 19 reports from 6 years previous.
HMRC have been provided with a means to identify all landlords and all company lets along with a system that collates through UTR spread portfolios.
Section 23 might be more encompassing but as it stands at the moment tax on rental income is an opt in system.
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It wasn’t 934 lettings complaints. That was the number taken forward for review. Annualised, the number of letting complaints tops 7,000.
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7000 complaints in 4,100,000+ tenancies is still only 0.17% (1:586). In context, the average letting agent receives 1 complaint every 2 years.
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What we actually need is a system similar to the one now deployed for employment tribunals where in order to bring a claim or dispute a deposit retention the claimant must pay a small some of money first. Thus reducing spurious claims based upon “well it doesn’t cost me, so I might as well give it a go”…
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ditto with tenants that waste hours of my time disputing deposits over obvious wrongs such as failing to clean; perhaps introduce a non-refundable payment from the tenant payable to dps before a claim can be considered?
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What a sensible suggestion.
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At long last, someone who seems to be able to influence government as regards the rules governing our profession has come up with the ‘brilliant’ idea of licensing agents. I have been in this profession for 47 years and ever since I first started licencing has been muted to successive government after successive government but none will grasp the nettle and by doing so rid our once honourable profession of the rogues and cowboys for good. I only query why the outgoing Ombdusman has only now thought of this earth shattering idea after having been in post for nine years when he could have done something about it ‘on his watch’.
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There is ample legislation out there currently with which to deal with rogue and/or cowboys agents and landlords, its the lack of will (and resources probably) by most local authorities to use them that allows such people to flourish.
A licensing scheme would not make a jot of difference to them in the same way that the Gas Regulations haven’t stopped some landlords from renting property without a CP12 or the Deposit legislation hasn’t stopped some landlords and agents from not protecting deposits.
Punitive legislation only really works when there is a real chance that the penalties will be applied to the wrongdoer.
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They can’t even police the new rules over letting fee’s.
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The Estate Agents Act is now mildly out of pace when bolted to CPRs and BPRs. Prior, it was well out of sync.
The bigger problem is the private landlord sector opting to use budget passives and budget agents (who don’t always get things right). Many landlords now find it easy to get listings at low or no cost into main portals.
The biggest fall down is when they self manage and fail to keep up with laws and legislation, that government are under manned and under funded to enforce
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