Private tenants and leaseholders could be overpaying managing agents by £1.4bn a year according to the government. The Department for Communities & Local Government has issued a ‘Call for Evidence’ to see if a new regulatory model is needed in the letting and managing agent market.
The review covers the private rental sector and leasehold market. It also includes freehold properties on estates where an agent manages the upkeep of communal ground.
The government says that many tenants could be overpaying for services and have limited ability to challenge or change the property agents responsible for their homes. Tenants often have no contractual relationship with their property agent and they have limited access to redress. The Call for Evidence also says that a lack of minimums standards has allowed unscrupulous agents to enter the market.
The government is planning to bring forward detailed proposals in 2018. It has asked for views on:
- the minimum entry requirements and standards agents should meet
- the potential options for a new regulatory approach
- empowering consumers by providing greater choice and rights to switch agent
Launching the Call for Evidence, Sajid Javid, the secretary of state for communities and local government, said “This is supposed to be the age of the empowered consumer – yet in property management, we’re still living in the past. I’ve already announced plans to regulate letting agents, including banning fees for tenants. I’ve also made clear that I want to see an end to unjustified use of leasehold in new-build houses. And today I’m setting out a plan to fix the problems in the property agent market.”
James Burgoyne, Director – Claims & Technical, Brunel Professions says that most property agents provide excellent services to tenants, “Best practice agents have nothing to fear from the government’s plans, and this may even be good news for the truly professional firms, who may see increased business if the worst firms are identified and removed from the market. But those that do not treat tenants fairly will have to change their ways if this results in new legislation. Tighter rules and better regulation will help to reduce the cost of professional indemnity insurance if better management reduces the number of complaints and claims against agents.”
Brunel provides a wide range of Professional Indemnity Insurance broking services to property professionals. Click here to find out more, or call Jonathan Filer on +44 (0)117 325 0752.