Agents are warned to ensure that they have the correct redress in place after a lettings firm has had a successful appeal against a £3,000 fine overturned.
The fine was levied against London agent Samson Estates for not having adequate redress membership, although it did belong to The Property Ombudsman.
Samson Estates then successfully appealed to the First-tier Tribunal in July 2017 over a the fine from Newham Council.
The local authority had received a complaint from a tenant in February 2017 regarding a residential block that the agency managed, but discovered it was a member of TPO for its lettings work but not for property management.
The fine was then overturned in July 2017, with the First-tier Tribunal ruling that “there is insufficient evidence that Samson’s membership of TPO in connection with property management work was insufficient to meet their obligations under the order.”
But Newham Council launched an appeal against this ruling to the Upper Tribunal in June 2018, with an oral hearing heard this March.
The tribunal ruling, released this week, concluded that the First-tier Tribunal had made an “error in law,” and highlighted the Enterprise and Regulatory Reform Act 2013, which said “a person who engages in property management work must be a member of a redress scheme for dealing with complaints in connection with that work”.
TPO has now issued a reminder to agents to ensure they have the correct redress membership to cover the work they undertake.
Katrine Sporle, property ombudsman, said: “Local authorities have a duty to act where agents fail to register with an approved redress scheme, or fail to have the correct membership.
“In this case, the agent believed they were covered for redress by their TPO membership for sales and lettings, and as a result did not receive the maximum fine of £5,000.
“However, this should act as a timely warning to all agents to ensure you have appropriate redress membership to cover the work you carry out.”
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