13 April 2018 by

Government Plans for Stronger Protection against ‘Rogue’ Letting and Managing Agents

On the 1st April 2018 the government announced new proposals to introduce stronger protections for leaseholders and tenants against letting and managing agents. It will also look at any unfair costs involved in the property management process.

Background Behind the Proposals

Historically, property managers and letting agents have faced significant criticism that leaseholders are being asked to pay unexpected costs based on vague invoices and administrative charges. Following the recent Grenfell disaster, property management has now become a focal point for the government and has encouraged a crackdown on so called ‘rogue agents’ who are allegedly not carrying out their responsibilities fairly.

While still acknowledging that most property agents do take a professional approach, Housing Minister, Heather Wheeler said that ‘by introducing new standards for the sector, we will clamp down on the small minority of agents who abuse the system, so we can better protect tenants and leaseholders who find themselves at the end of a raw deal’.

What is Proposed?

The main proposals for changes to be made in order to regulate this area are as follows:

  • The introduction of a new independent regulator to monitor agents, with the ability to enforce action against agents who fail to comply with the regulations. This could be extended to include criminal sanctions for severe breaches!
  • The requirement for letting and managing agents to obtain a nationally recognised qualification to practice.
  • An easier system to allow and support leaseholders in challenging unfair fees, including administration costs and service charges.
  • Support for leaseholders to switch managing agents based on performance. Currently leaseholders are not usually a party to the contract with the managing agent, so how in practice this will be achieved will be interesting!
  • Requirements for letting and management agents to undertake continual training and professional development.

The proposals will be considered by a working group of letting, managing and estate agents together with leaseholders, tenants and regulation experts who will put together a final proposal by early 2019. It is thought that the group will also be considering unfair charges including the use of restrictive covenants and other administrative costs and whether these should be capped or banned completely.

The idea is that by introducing these changes, a more transparent industry will be created for those involved and ultimately give landlords, renters and leaseholders greater confidence and reassurance in relation to the professionalism and fairness of property managers and agents.

You can contact one of our other solicitors in our Leasehold Extensions and Property Management team here.

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