Lettings Agents call for Mandatory Licensing

Sept. 21, 2010 - PRLog -- Bushells Managing Director, Eric Walker, joined with other leading agents to discuss licensing and regulation of lettings agents. Bizarrely, the Government wants the industry to regulate itself which of course means that only professional agents will volunteer leaving some rogue companies to continue to trade however they wish.

The National Approved Letting Scheme is an accreditation scheme for lettings and management agents offering peace of mind to landlords and tenants in knowing that they are dealing with a firm which agrees to meet defined standards of customer service, together with having in place the necessary insurances to protect clients' money plus a customer complaints procedure offering independent redress.

Unlike ARLA and NAEA, it is not an association of members, rather it is a kite mark which endorses standards in agency. ARLA and NAEA have done much to promote professionalism within the industry and ensure that members have appropriate insurance and audits of clients money. NALS is not competing, rather it is an umbrella which endorses that an agent meets with the standards reasonably expected.

Lettings is becoming an increasingly technical discipline. It is imperative that agents comply with all necessary legislation and that both landlords and tenants are protected when things go wrong. If an agent is not a member of ARLA, NAEA or NALS, you have to ask the question 'why?'

What all landlords must remember is that a tenancy agreement is a contract between landlord and tenant. In the event the agent goes out of business, the landlord must repay the tenants deposit if the monies are not protected. Further, a landlord cannot seek possession of their property under section 21 of 1988 Housing Act until such time as the deposit is protected.

All ARLA, NAEA and NALS agents have Clients Money Protection Insurance as a mandatory requirement of membership. Furthermore, they will have Professional Indemnity Insurance and offer peace of mind by having their clients accounts audited by an independent auditor. We find that a number of agents who regularly offer very cheap commissions are able to do so as they don't have to meet the costs incurred in protecting their clients. In some cases, this 'saving' has cost landlords thousands of pounds as not only have they had to replace a missing deposit, but in some cases have been ordered to pay the tenant three times the amount of the deposit as compensation for not having the deposit registered in an approved Tenants Deposit Scheme.

In one such case, a tenants deposit was registered at the commencement of the tenancy, however, the agent failed to pay their subscription fees and protection ceased. It is therefore worth checking periodically to ensure that all is in order.

In conclusion, Bushells sincerely believes that some form of licensing is essential. If it has to be voluntary, then landlords and tenants should check to ensure that the agent with whom they are dealing is properly accredited, insured and that all parties are protected.

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Bushells is one of London's leading Estate Agents. Founded in 1937, we are one of the most successful estate agents in London. We take pride in giving honest, no nonsense advice whilst maintaining the highest standards of service. We are members of all recognised industry bodies including ARLA, TPO and NAEA.