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ARLA
launches new licensing scheme to protect consumer interests - Consumer interests
safeguarded by letting agent licensing
See
also:
MPs Welcome Licensing for Letting Agents
and
Early Day Motion In Support of ARLA Licensing ________________________________ Other
ARLA Press Releases on this site ________________________________ ARLA
PRESS RELEASE: 05 May 2009 Hundreds
of thousands of pounds of consumers’ money is lost each year to unprotected, unprofessional
and unethical letting agents. In
a survey by the Association of Residential Lettings Agents (ARLA), 95% of consumers
revealed that they believe letting agents should be licensed and it is a shock
for many to learn that there is currently no scheme in place at all. A
growing number of tenants and landlords are losing out to cowboy agents in the
following ways: - Loss
of funds through a lack of client money protection
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No professional indemnity insurance in place to protect a consumer from a serious
error;
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Loss of monies due to the unlicensed agency holding the funds going into administration;
- Poor
advice to landlords, for example about their legally-required deposit protection
responsibilities, which can result in loss of the deposit for tenants and/or a
fine for landlords;
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No commitment to best practice or any form of independent redress scheme for when
things go wrong.
To
prevent the practices listed above, and offer assurance to consumers, ARLA is
today launching a Licensing Scheme for its members, thereby establishing the highest
standards for letting agents in the UK. Housing
Minister Iain Wright will be speaking at the launch of the scheme in the House
of Commons, saying that the establishment of competency and qualification standards
will have wide-ranging benefits for consumers Ruth
Lilley, Head of Membership and Professional Development of ARLA, said: “ARLA has
lobbied the Government for 10 years to assist us in establishing higher industry
standards. For too long the rental sector has been seen as the black sheep of
the property market with a lack of regulation of and a requirement for redress
to protect the consumer when the agent’s failings are to the financial detriment
of that consumer. “The
ARLA Licensing Scheme will create the gold standard for letting agents in the
UK, offering consumers best practice service and advice – as well as a commitment
to the protection of their money.” As
of today, all ARLA members will need to be licensed as part of their membership,
which includes the following implications: - Each
individual member will hold a gold standard professional qualification relating
to lettings;
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All members must undertake Continuing Professional Development
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Agents must ensure they have client money protection schemes in place to protect
all tenant and landlord funds held by their office;
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All clients funds require to have an annual independent audit
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Agents must have professional indemnity insurance in place;
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Agents must sign up to an independent redress scheme;
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Agents must abide by a strict code of practice.
None
of the above is compulsory for letting agents as standard at the moment. ARLA’s
sister organisation, the National Association of Estate Agents (NAEA) will follow
suit with the launch of its own licensing scheme later this year. Adam
Sampson, Chief Executive of Shelter, said: "It is high time the government acted
to introduce statutory licensing for all letting agents, something that Shelter
has been campaigning about for some time. However, industry led best practice
is a positive step in the right direction. We welcome ARLA’s new licensing scheme
and it’s commitment to raising standards in the sector. “All consumers should
have the right to expect a professional letting service, and have access to redress
when problems arise” Simon
Gordon, Head of Communications, National Landlords Association said: We very much
welcome this latest development as another push to raise standards within the
private-rented sector. Letting agents are in a particular position of trust between
landlords and tenants and their practices must be above reproach. The ARLA Licensing
Scheme should go a long way to ensuring consumers are protected from poor letting
agents and improve the image of the sector as a whole.” Letting
agent and ARLA President David McMaster commented: “As an agent, this is something
I have been campaigning for for years. Having a license helps me to set my business
apart from all the unscrupulous, untrained and unethical agents who I hope will
one day be ousted from the market because of this scheme.” Paul
Ramsden, Deputy Chief Executive, Trading Standards Institute, commented: “The
absence of Government regulation of letting agents has long been a concern for
TSI. We have in the past, and continue to, call for tighter controls of this sector.
In general, but even more so during these difficult times, people will leave themselves
vulnerable to letting agents intent on reaping the benefits of the regulatory
gap in which they operate. “Though
sometimes difficult, consumers, be they tenants or landlords, should seek out
letting agents backed by bodies operating OFT-approved codes of conduct to give
themselves some level of protection. Whilst it is gratifying to see this increase
of self-regulation amongst some sector operators, persons will continue to fall
prey to unscrupulous letting agents until such time that a compulsory and robust
system of regulations is introduced.” Richard
Beamish, Chief executive of Asset Skills, the Sector Skills Council for the property
industry, said: “Letting agents often suffer unfairly with their public image
despite most being honest, well run businesses. We have long pushed for minimum
standards in estate agency and fully support ARLA’s licensing scheme for letting
agents. We believe it will go far in improving public perception of the profession.”
Richard
Capie, Director of Policy and Practice, the Chartered Institute of Housing, said:
“The UK housing market needs far-reaching wide-scale, holistic reform to deliver
fair, affordable and flexible housing in the future. The Chartered Institute of
Housing believes the Private Rented Sector is an essential part of the mix with
huge potential to meet the aspirations of many people currently unable to access
suitable housing. The licensing scheme represents a major step forward and will
give greater confidence to tenants and housing professionals alike.” Source
ARLA
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