Mandatory redress in lettings industry moves closer

The requirement for all letting agents to have to belong to an approved redress scheme has come closer.

Ian Potter, managing director of ARLA, thinks that implementation will now be October this year.

Last November, housing minister Kris Hopkins said that he expected redress schemes to go through the approvals process in January. He urged letting agents to join a redress scheme before it became compulsory.

However, approvals are only just starting to come through for the redress schemes and it is likely to be announced later today that both The Property Ombudsman and Ombudsman Services have received approval, together with a third, as yet unknown, scheme.

While both Property Ombudsman and Ombudsman Services made it known they had applied, the Government made it clear it wants a wider choice.

Potter said: “I always understood there was a desire, for some reason or another, to have more choice than the existing two schemes. I have to admit I do not understand the consumer benefit in that, as they will have to identify the scheme being used by the agent.

“The likely start date now will be October, and I would suspect a time for agents to comply.”

The compulsory redress schemes will be different from the voluntary schemes – notably TPO – that letting agents already join. The new schemes will not be able to enforce a code of practice.

However, consumers would be able to complain if an agent belonged to the TPO’s existing scheme or to a body such as ARLA and did not obey the respective codes of practice.