At last months HMO Licensing Governance meeting, we learnt that Portsmouth City Council will be enforcing new government legislation to ensure all letting and managing agents belong to appropriate redress schemes.
Anyone who manages properties for a friend or who finds tenants, will be classed as a letting agent if they collect rents or other monies and accept or receive any type of payment for doing so, however small. As a result, these people will need to belong to one of the letting agent redress schemes.
Anyone found not belonging to such a scheme faces possible prosecution and large fines.
According to the Property Redress Scheme (one of three available schemes): "landlords that manage a few properties as a side business can comply with the law for a little as £95 + VAT per year. No strings attached." They say other schemes may require additional insurance to be in place including Client Money Protection cover. This can be costly.
Sean Hooker, Head of Redress & Ombudsman Office at the Property Redress Scheme said, in answer to a question the need for compulsory insurance for members of the scheme: "To reconfirm, unlike the Property Ombudsman we do not require agents to have any compulsory insurances. We do ask if they have it but again unlike TPO we do not need the member to send us the policy.
PII insurance is a prudent insurance to have and protects against losses stemming from professional advice. It is widely available in the market place but we do have a sister company that offers it and PRS customers can get a discount on this. PRS does not do advised sales but we have been registered with the FCA as an approved introducer for Hamilton Fraser Insurance. HFI are FCA regulated to sell insurance on a closed basis and does not offer multiple products from different insurers. Agents are free to shop around.
Deposits are not an issue either way. The legislation applies to any agent acting on behalf of a third party. Most landlords will not be required to join (only those managing properties on behalf of other people). If an agent does not take a deposit then they are still an agent. If they do then the TDP schemes kick in. In general the redress schemes will not deal with these complaints.
In terms of accreditation, by this the schemes mean being part of an agent body or scheme, such as ARLA, NAEA,RICS, UKALA or NALS. The landlord "training schemes" are not what is meant by "accreditation". The principle reason for the importance of these organisations is the Client Money Protection insurance that is offered by these schemes. This is insurance that ensures that customers of the agent can get their money back if the agent ceases to trade and their client account is not accessible. It is not mandatory to be a member of these bodies to join PRS. TPO make it difficult for people to join if they are not and OS Properties have deals in place with a number of these bodies and it is cheaper to join through this avenue than as a standalone applicant.
From our point of view, being a member of a body and having CMPI is prudent and we have a small incentive to do so by offering reduce case fees to CMP holders. We also can introduce a member to HFIS standalone CMP product CMProtect and there is a discount on this product. Again as will all introductions we do not offer advised sales and the member is free to shop around.
I hope this makes sense and that where you have landlords that manage a few properties as a side business can comply with the law for a little as £95 = VAT per year. No strings attached."
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.