Letting agents and property management companies will now be legally required to be a member of an approved redress scheme.
The legal obligation is expected to come into effect later this year after the department for communities and local government (DCLG) approved the property ombudsman (TPO) to provide a free and independent redress service to landlords and tenants.
To date, more than 11,000 letting agents have already registered with TPO and are voluntarily following the standards outlined in TPO’s Lettings Code of Practice, which enables consumers who are dissatisfied with the service provided by registered firms to have their complaints independently investigated and reviewed by the Ombudsman.
The ombudsman, Christopher Hamer, said: “As the largest redress scheme in the property sector I am naturally very pleased that TPO has received official recognition from the government as an approved redress scheme. With 60 per cent of UK letting agents already in membership with TPO this will mean no change for them.
Increase in enquiries
“However, TPO experienced a 34.2 per cent increase in the number of consumer enquiries relating to letting agents not registered with TPO during 2013, which really underlines the importance of mandatory redress for letting and management agents.
“Whilst my role as ombudsman means that I am not a regulator and I can only review complaints after a dispute has occurred, making redress a legal requirement for lettings is a positive move to enhance consumer protection. Clearly it would be better if complaints did not arise in the first place and robust legislation to enforce controls was in place.
“That said, the government has been quite clear about their desire to see the industry self-regulate and I believe that compulsory redress is one of the many safeguards needed for consumers.
Standards
“We will now emphasise to agents not currently registered with a redress scheme the benefits of joining TPO, not least of which is that those agents will be able to demonstrate to their landlords and tenants that they follow the comprehensive set of standards contained in the TPO Code of Practice – the only Code of its kind in the industry – and we look forward to welcoming many more agents to the scheme following our government approval.”
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